Amid what top analyst Youssef Squali at Cantor deems the “brain drain” and “realignment” flood of departures at Twitter Inc (NYSE:TWTR), he offers his two cents from the sidelines on the social media platform’s influx of changes. In reaction, the analyst reiterates a Neutral rating on TWTR with a fair value of $20, which marks a just under 13% increase from current levels.
This week alone, the company sees another two key executives exit its doors, with CTO Adam Messinger and VP of Product Josh McFarland leaving on the heels of COO Adam Bain’s resignation just last month. Meanwhile, it’s been a rough stretch for Twitter, as in October, the company announced a layoff circling 9% of its workforce. What does one of the best analysts on Wall Street think of this “revolving door” conundrum?
“It’s hard to know for certain, but some of these changes seem to be involuntary as management tries to flatten the reporting functions and streamline the organization by having engineering, product and design management functions report directly into CEO Dorsey. These changes are also happening at a time when Oct./Nov. users and engagement traffic data remain inconclusive, according to comScore, despite the new strategy around live events, a presidential election, and a President-elect who uses the platform extensively to communicate with his 20M+ followers. These changes obscure the timing and the magnitude of the turnaround required to support a higher valuation for the stock, in our view. Barring a take-out or the prospect for one, we expect the stock to remain range-bound short term […]” Squali contends.
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, top five-star analyst Youssef Squali has reached a high ranking of #29 out of 4,291 analysts. Squali upholds a 68% success rate and garners 10.1% in his yearly returns. However, when recommending TWTR, Squali loses 14.6% in average profits on the stock.
TipRanks analytics demonstrate TWTR as a Hold. Based on 26 analysts polled in the last 3 months, 5 rate a Buy on TWTR stock, 16 maintain a Hold, while 5 issue a Sell. The 12-month average price target stands at $17.56, marking a 2% downside from where the stock is currently trading.