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4 Twitter Analysts Break Down New Features, Revenue Goals

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4 Twitter Analysts Break Down New Features, Revenue Goals

At Twitter Inc's (NYSE: TWTR) analyst day Thursday, the company announced a range of new products that it believes will help the social media platform meet its 2023 user base and revenue goals.

The planned products include a subscription-based feature, Super Follows, that will allow users to charge their followers for additional content. 

The company also unveiled a feature called microcommunities, which will allow users to form small groups based on a common interest; an improved safety feature that could detect when a user is being overwhelmed with negative comments; and a feature called Birdwatch aimed at stopping the spread of misinformation.

The Twitter Analysts: Canaccord Genuity analyst Maria Ripps maintained a Hold rating on Twitter and increased the price target from $65 to $82.

KeyBlanc Capital Markets analyst Justin Patterson maintained an Overweight rating and raised the price target from $80 to $90.

Raymond James analyst Aaron Kessler maintained a Market Perform rating.

Rosenblatt analyst Mark Zgutowicz maintained a Neutral rating and increased the price target from $55 to $65.

Canaccord Says Twitter Topics Increase Retention: “Tweets from Topic follows have an 8.2% engagement rate, more than double the 3.8% for account-based follows,” analyst Ripps said in a note.

Twitter will increase advertisement revenue through Topics, the analyst said. 

“20% of accounts (already) opted-in to seeing more personalized during FY20, and Twitter plans to leverage explicit signals from Topic follows and searches to improve its targeting capabilities.”

Twitter’s plans to roll out Super Follows and Tweetdeck may increase revenue, she said. 

“While increasing the pace of product innovation and revenue diversification are welcomed signs, Twitter’s lofty goals create execution risk.”

KeyBanc Sees Upside To 2023 Twitter Revenue Target: KeyBanc raised its Twitter price target to $90 and set a bull case target of $122. 

“We project revenue doubles from 2020 to 2023E to $7.58B,” Patterson said in a note.

“We believe the combination of a modular, hybrid cloud architecture and better internal alignment provides employees the tools to double development velocity by 2023.” 

RayJay Says Twitter Poised To Double Revenue: Twitter has been historically slower to roll out new products than its competitors, Kessler said in a note. 

“To address this, management has set a target to double the number of successful features deployed per employee by year end 2023,” the analyst said. 

“The company outlined a number of key product objectives, many around the common theme of increasing the quality of interactions on the platform and increasing discoverability of topics and conversations that users are interested in,” he said. 

Rosenblatt On Twitter's 'Ace In The Hole': Zgutowicz said he's unclear on how Twitter plans to use features like Superfans and Tips to further monetize the platform.

“We see only modest contribution here and likely limited company focus,” the analyst said.

Rosenblatt has been critical of Twitters ad breadth in the past, he said. 

“However, the soon to be enforced new iOS/IDFA tracking policies may turn out to be a blessing in disguise for Twitter,” Zgutowicz said.  

“A perhaps counterintuitive benefit to Twitter is greater reliance on brand reach/frequency spend, or alignment with industry parity in contextual ad targeting,” the analyst said.   

“Twitter's 85% branding mix is perhaps its ace-in-the-hole amid near and potentially long-term iOS disruptions.”

TWTR Price Action: Twitter shares ended Monday's session up 0.73% at $77.63. 

Latest Ratings for TWTR

DateFirmActionFromTo
Apr 2021Argus ResearchMaintainsBuy
Apr 2021WedbushAssumesNeutral
Apr 2021Wolfe ResearchInitiates Coverage OnPeer Perform

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