Analysts at Canaccord maintained a Buy rating on Twitter stock, highlighting its recent integration as a positive catalyst
Canaccord has reiterated a Buy rating on Twitter Inc (NYSE:TWTR) stock along with the downward revision in its 12-month target price from $45 to $40. The micro-blogging platform has fallen approximately 22% since the start of fiscal year 2015, as compared to S&P, which is down by only 5% mainly due to an 18% move down the day after second-quarter earnings were released.
Twitter has been in the news a lot lately, especially after its former Chief Executive Officer, Dick Costolo revealed his intentions of leaving the company to make way for its co-founder, Jack Dorsey. Several investors voiced their opinions due to the increasing uncertainty and the strategic direction of the company.
The micro-blogging platform managed to beat consensus for its previous quarter. The company reported adjusted earnings per share of $0.07, surpassing its estimate of $0.04. Additionally, revenues clocked in at $508.3 million, beating its estimate of $482 million. Despite of reporting better-than-expected results for the quarter, stock slipped in the after-market trading session as the company missed its monthly active users (MAU) estimates.
According to the sell-side firm, as advertising story remains solid with the second-quarter revenue beat and reacceleration in average revenues per unit (ARPU), the company must focus on user growth. Additionally, analysts at Canaccord believe that Twitter’s mobile search penetration has improved to more than 90% after being available for only four months.
The search engine behemoth, Google Inc (NASDAQ:GOOGL) previously announced that all the real-time “tweets” will be included in mobile and desktop results. This recent development can easily help Twitter in attracting more users and increasing its monthly active users.
Out of the 42 analysts polled by Bloomberg, 15 rate Twitter stock a Buy, 25 recommend a Hold, while the rest tag it as a Sell. The 12-month consensus target price is $39.14. The stock is currently down over 0.78% in the pre-market trading session and has fallen approximately 43%, as compared to Dow Jones Index that fell approximately 4% in the last 12 months.
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