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Twitter Takeover Speculation Likely To Provide Support For The Stock

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Twitter Takeover Speculation Likely To Provide Support For The Stock

Axiom believes takeover speculation on Twitter Inc (NYSE: TWTR) will continue to keep investors interest in the stock.

The firm boosted its 2017 and 2018 EBITDA estimates by 7 percent following the third quarter results beat. As a result, the target price is increased from $16 to $18 while analyst Victor Anthony kept a Hold rating.

Since going public in November 2013, Twitter has added 76 million average monthly active users (MAU) reach 317 million at the end of September quarter, representing a growth of 31.54 percent, which is far less than its rival.

The brokerage listed the following factors after reviewing the September quarter results for reaching its investment thesis:

  • The social media company has 15 live events that are under active negotiations.
  • Core O&O revenue uptick missed Axiom's estimates, decelerating from 15 percent in second quarter to 9 percent.
  • Revenue outlook implied further revenue deceleration pace in the fourth quarter.
  • Total revenue growth was only 1 percent, suggesting that ad growth would have fallen 2 percent.

In a note, Anthony said, "The sales headcount reduction is likely to lead to ad revenue variability that could put 4Q revenue estimates at risk. We have increased our '17 & '18 Adj. EBITDA estimates and increased our price target to $18 from $16. Persistent M&A speculation is likely to keep a floor on the shares in the midteens."

Latest Ratings for TWTR

DateFirmActionFromTo
May 2019Initiates Coverage OnEqual-Weight
Apr 2019MaintainsBuyBuy
Apr 2019MaintainsNeutralNeutral

View More Analyst Ratings for TWTR
View the Latest Analyst Ratings

Posted-In: axiom Victor AnthonyAnalyst Color Price Target Reiteration Analyst Ratings Tech Best of Benzinga

 

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