BMO Cuts Twitter Target, Didn't Expect Guidance Miss

Loading...
Loading...
  • Twitter Inc TWTR shares have declined 33.45 percent over the past six months, from a high of $42.27 on April 28.
  • BMO Capital’s Daniel Salmon has maintained a Market Perform rating on the company, while lowering the price target from $34 to $32.
  • Salmon expressed disappointment with the 4Q guidance, while mentioning that it could bring investor focus on to whether advertisers were starting to moderate their spending growth on Twitter.

Analyst Daniel Salmon also mentioned that the company has reported its 3Q15 revenue and EPS ahead of the estimates and the consensus, while total MAUs, excluding SMS fast followers, came in below the consensus but above the estimate.

Ad engagement grew ahead of the estimate at 165 percent year on year, while cost per engagement was below the estimate, driven by the rollout of autoplay video ads.

However, Twitter has guided to 4Q15 revenues meaningfully below the consensus forecast. This was the first time that the company broke down its ad revenue, mentioning that O&O accounted for 878 percent, while off-network accounted for 13 percent of the total ad revenue.

“With a new CEO and a number of new product and feature launches recently -- most importantly, Moments and Promoted Moments in the US -- we did not expect a material change in fundamentals,” Salmon stated.

However, Salmon believes that several monetization opportunities still exist for the company, although execution has been challenged due to the various changes in recent times.

Loading...
Loading...
Posted In: Analyst ColorPrice TargetAnalyst RatingsBMO Capital MarketsDaniel Salmon
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...