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Positive Trends At Twitter Don't Budge Sell-Side Firm From Negative Outlook

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Positive Trends At Twitter Don't Budge Sell-Side Firm From Negative Outlook
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Victor Anthony of Aegis Capital maintains a Sell rating on Twitter Inc (NYSE: TWTR)'s stock with a $12 price target given his belief that the company's woes will continue with no sign of relief from strategic alternatives.

According to Anthony, it is "unlikely" that Twitter will see any serious acquisition offers. On the advertising front, ad growth is also "unlikely" to be seen this year and the analyst is modeling a 10 percent year-over-year decrease.

Moving on to user statistics, Anthony's checks are showing an uptick in daily active user and monthly active user during the first quarter. However, this shouldn't be seen as a glimmer of hope as the uptrend isn't enough to convince advertisers to spend more on the platform. In fact, the analyst's checks also found that Twitter is losing out in the ad wars from new entrants, including Pinterest as advertisers are finding a better return on their ad spend elsewhere.

In addition, Anthony suggested Twitter's loss of the rights to live-stream NFL matches "eliminated what was a bright spot" in the fourth quarter.

"We still see no clear reason to own the equity and see more downside risks to the stock due to the ad struggle," Anthony wrote.

Q1 Estimates

Anthony also made offered the following first-quarter estimates:

  • Revenue of $532 million (down 12 percent year-over-year).
  • Adjusted EBITDA of $99 million (down 45 percent year-over-year).
  • Adjusted earnings per share of $0.02.
  • MAUs of 321 million, up two million users year-over-year.

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Latest Ratings for TWTR

DateFirmActionFromTo
Oct 2018Aegis CapitalMaintainsBuyBuy
Oct 2018BMO CapitalMaintainsMarket PerformMarket Perform
Oct 2018NomuraMaintainsNeutralNeutral

View More Analyst Ratings for TWTR
View the Latest Analyst Ratings

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