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Twitter's Live Streaming Efforts Off To Good Start, But Not A Quick Fix

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Twitter's Live Streaming Efforts Off To Good Start, But Not A Quick Fix
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Twitter Inc (NYSE: TWTR) reported its Q3 results better than feared.

“While management's live streaming strategy and product tweaks appear to be bearing fruit, driving improved daily usage/ engagement (if not MAUs and revenue), it's too early to declare victory,” Cantor Fitzgerald’s Youssef Squali said in a report.

Squali maintained a Hold rating on the company, while raising the price target from $18 to $20.

Results

Twitter reported its Q3 revenue 2 percent ahead of Street expectations and EBITDA 21 percent higher. Total revenue grew 8.2 percent year-over-year to $615.9 million, with ad revenue rising 6.3 percent to $544.9 million. Data licensing came in at $71.0 million. The company posted EBITDA and EPS of $181.3 million and $0.13, respectively.

Rays Of Hope

Slow growth in MAUs continued, with total Monthly Active Users (MAUs) rising 3.3 percent sequentially to 317 million, ~1 million ahead of consensus. Twitter witnessed the second consecutive quarter of year-over-year acceleration in daily active usage, Tweet impressions, and time spent, on the back of “product improvements in timeline/ notifications specifically,” Squali mentioned.

“Notably, management has now trained its focus on re-sizing the cost structure to bring more efficiency, with an eye toward GAAP profitability in 2017. We believe 3Q results should set a floor for the stock, but material appreciation (other than from a take-out) is likely to take several quarters as the company works through a sales reorganization in 4Q and adds more live content to spur engagement,” the analyst wrote.

Latest Ratings for TWTR

DateFirmActionFromTo
Dec 2017Evercore ISI GroupInitiates Coverage OnIn-Line
Nov 2017CitigroupUpgradesSellNeutral
Oct 2017JP MorganMaintainsNeutral

View More Analyst Ratings for TWTR
View the Latest Analyst Ratings

Posted-In: Cantor Fitzgerald Youssef SqualiAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

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