Tags: wall street | twiter | stock price | estimates

Wall Street Analysts Are Scrambling to Lower Their Estimates On Twitter

Wednesday, 29 Apr 2015 05:55 AM

Twitter's earnings, which were leaked early yesterday due a mishap at Nasdaq's sister website shareholder.com, disappointed analysts across Wall Street.

The stock tumbled 18 percent as first-quarter revenue fell short of estimates, and the firm cut its sales forecast as it struggles to attract more users and advertisers. Also concerning to investors is the firm's new sales forecast. Sales will be $470 million to $485 million in the second quarter, missing the average analyst projection for $538.1 million. 

Analysts that cover Twitter are out with new research and forecasts for the social networking giant this morning, and most of it it isn't looking good.

The average 12-month price target, according to data from Bloomberg, fell from $53.21 yesterday to $49.36 as of this morning. The stock closed yesterday at $42.27.

Here is a sampling of what analysts are saying.

Sterne Agee is calling the quarter "A Mixed Bag; Monthly Active User growth slowing; Lowering Estimates," going on to say that it was disappointed in revenue and the outlook for average monthly active users (MAU). 

Canaccord Genuity lowered its price target from $56 to $52, calling the quarter mixed. The firm said that it was, however, "encouraged by 74% revenue growth, driven by both users and monetization." It says the most negative aspect was the "low visibility" of MAU growth.

Citi, which has a neutral rating on the firm, said that in contrast to Q4 when user growth was disappointing but advertiser demand and monetization came in above its expectations, user growth was stronger in Q1 while advertiser demand and monetization disappointed.

Citi believes that the commentary from Twitter about Q2 suggests "continued near-term headwinds and limited visibility to address the factors impacting current results...While mgmt. is actively pursuing initiatives to improve user growth, the effectiveness of its ad products, and overall monetization, we continue to believe that many of the bull case assumptions are priced in even at after-market levels. We need to gain more confidence in these user and monetization growth initiatives before getting constructive." 

Pacific Crest made one of the largest cuts to Twitter's price target, going from $63 to $52, although the firm says it remains "positive" due to a "number of new products." It was "not impressed" by Twitter's execution in the quarter, but "we see upside into the low 50s on our new lower estimates."

Stifel reiterated its sell rating on Twitter on concerns about user growth and the amount advertisers are spending. "Users appeared stronger with 14mm MAU adds q/q after just 4mm net adds in 4Q:14, but management suggested 2Q:14 MAUs were off to a slow start and the metric itself will be obfuscated by the inclusion of 'SMS Fast Followers' (emerging market feature phone users that will monetize at meaningfully lower rates for the foreseeable future) beginning next quarter," Stifel added.

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Twitter's earnings, which were leaked early yesterday due a mishap at Nasdaq's sister website shareholder.com, disappointed analysts across Wall Street.
wall street, twiter, stock price, estimates
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2015-55-29
Wednesday, 29 Apr 2015 05:55 AM
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