Twitter's Q4 Earnings On Tap: Will MAUs Get A Trump Bump?

Blake Harper of Loop Capital commented in a research report that Twitter should "benefit marginally" from the growing follower base of Trump, but it may not be enough to improve the company's profile. Specifically, the analyst believes that Twitter needs more product upgrades like its Explore feature in order to drive sustainable and meaningful monthly active user (MAU) growth.

Harper continued that Twitter replaced its Moments feature with a new "Explore" feature last week. The feature allows users to see content that is derived from topics and interests. The analyst noted this is a needed upgrade as the original Moments feature "failed to be meaningfully improved upon" and/or drive substantial MAU growth since it was launched in 2015.

'Tweeter-In-Chief' Can't Hurt Twitter

Harper argued that the spotlight from the "Tweeter-in-chief" can't hurt Twitter, as the president's use of the social media platform is mentioned in front page newspaper articles and TV news broadcasts across the world. Trump has more than 23 million followers on Twitter compared to just two million when he launched his campaign.

In fact, Trump gained almost 5 million followers in the month of January alone, but it is not yet clear if the followers are coming from new or already existing Twitter users. Nevertheless, the extra attention given to Twitter's platform demonstrates the social media's value as a service and should be taken advantage of by the company.

Bottom line, the analyst is expecting Twitter to show a "modest" increase in MAUs, but more product upgrades are needed before investors can become aggressive on the stock. Shares remain Hold rated with an unchanged $16 price target.