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RBC's Quick Reaction To Twitter's Q2 Earnings

RBC's Quick Reaction To Twitter's Q2 Earnings

Twitter Inc (NYSE: TWTR) reported Friday second-quarter results, which sent the stock higher in early market trading and showed acceptable growth rates, according to RBC Capital Markets' Mark Mahaney.

What Happened

Twitter's average monetizable daily active users (mDAUs) metric was introduced a few quarters and showed "decent growth" in the second quarter, Mahaney said on CNBC's "Squawk Box." The growth in usage is important for investors to see, particularly among U.S. users.

Twitter is known for reporting results above estimates and Friday's report is no exception, Mahaney said. The results show "things are well intact" at the company, but the stock is fairly valued near current levels.

Why It's Important

Exiting Friday's results, it's evident the narrative surrounding Twitter continued to improve. One of the more notable initiatives that's generating results is a product improvement which makes it much easier for Twitter users to find content on general topics, instead of individuals.

Twitter will face difficult year-over-year comparisons and margins could be impacted by the heavy investment spend, Mahaney said. Twitter will need to increase spending to be "absolutely sure" its platform won't be tampered in any way in the lead up to the 2020 U.S. Presidential election.

"Going into next year, Twitter actually should be pretty interesting as a stock -- not this year," he said.

Twitter's stock traded higher by 6.4% at $40.55 per share in Friday's pre-market session.

Related Links:

Bank Of America Bullish On Twitter Ad Testing

The Positives And Negatives From Twitter's Q1 Earnings Print

Latest Ratings for TWTR

May 2021BMO CapitalMaintainsMarket Perform
Apr 2021JP MorganMaintainsOverweight
Apr 2021UBSMaintainsNeutral

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