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Axiom's Anthony: Twitter Inc Must Up User Growth, But Google M&A Possible If Stock Stays Depressed


The most important metric for Twitter Inc (NYSE: TWTR) shareholders might not be on the income statement. "Twitter needs to re-accelerate user growth," Axiom's Victor Anthony told CNBC on Wednesday.

Anthony has a Buy-equivalent rating on the stock, and has a price target that implies shares can more than double from current levels. He explained his bull thesis to the outlet.

"I think that change will come -- it's not coming over the next several weeks -- but I do think it will come. They need to do something to accelerate user growth," Anthony said. That could include algorithmic changes and other product innovations, something Facebook Inc (NASDAQ: FB) has done in the past.

When asked if there's another strategy Twitter can use to benefit the stock, he explained that "for the stock to work, they need to re-accelerate user growth. Expectations for tonight are for the worse: declining user growth and [guidance] below consensus."

Anthony said he's hoping for "modest" user growth and guidance closer to consensus, but reiterated that Jack Dorsey needs to explain to analysts and investors how he plans to "drive users to the platform."

"An investment in Twitter today is an investment in Jack Dorsey...he has to instill that confidence on the call tonight," Anthony concluded.

What About M&A...With Google?

Anthony also gave a bit of color on one scenario that could make sense for investors betting on Twitter M&A. "I think if the stock continues to languish for most of this year, I think Google probably comes in and probably makes a bid."

Google, part of Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), could benefit from its lack of a footprint in the social media boom. Twitter could give Google "complete exposure" to the social media space, he added.

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