Twitter Inc TWTR shot higher on Friday following strong EPS, despite not adding as many monthly active users as the market expected. Wunderlich said that user growth is still a “work in progress,” but that new products may aid growth.
For now, Wunderlich says that Twitter is getting a pass on MAU growth as investors look to the future to make up for present failures. Additionally, the analysts are skeptical of Twitter’s ability to monetize logged-out users, but believe the “While You Were Away” feature, as well as direct messaging and video-editing capabilities, can ultimately attract new users and increase engagement.
Wunderlich believes that the stock is fully valued, raising its price target to $50 from $45, based on higher EPS estimates and the same valuation methodology.
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