Is Twitter Inc (NYSE:TWTR) destined to end in the graveyard of hall-of-Internet-famers like the once all-mighty social media platforms of a ’90s heyday past? BTIG analyst Richard Greenfield does not see a Yahoo fate for Twitter, having gone bullish on the social media titan back when the stock was still taking a dip just half a year ago. Now that the stock has made a grand comeback thanks to a strong first quarterly print for the year, even with a seesaw momentum, the analyst continues to back this titan with rising conviction.
Particularly as Twitter keeps implementing starkly better user upgrades, which will only strengthen the platform’s popularity among DAUs, the analyst reiterates a Buy rating on TWTR with a price target of $25, which represents a 34% increase from where the stock is currently trading.
Greenfield acknowledges, “There is no debating the horrible timing of our upgrade of Twitter to BUY on February 8, 2017 […] After reporting Q4 2016 earnings, the stock rapidly collapsed falling over 20%, with Twitter having nearly fully recovered after better than expected Q1 2017 earnings.” However, the analyst argues, “Despite the volatility in TWTR shares, the premise of our upgrade appears very much intact – namely increasing usage and engagement driven by an improving core product. We are increasingly confident in Twitter’s future as the algorithm they are using to surface relevant tweets/ads to a specific user is visibly improving […] A better consumer experience leads to a more valuable service that brings users back more often. #flywheel.”
While “It would be very easy to dismiss Twitter as just another once great Internet company destined for irrelevancy (AOL, Yahoo, Myspace, etc.),” Greenfield cannot help but believe investors have the wrong priorities at hand, underscoring, “Yet, the story investors should be focused on is the accelerating trends in Twitter users and engagement, culminating in DAUs up 14% in Q1 2017. […]” Because Twitter daily active users are signaled to “the right content,” they keep returning to the social media platform, and subsequently use Twitter for longer periods of time. Therefore, the analyst concludes with confidence for Twitter’s financial prospects in correlation with its enhanced user experience.
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, four-star analyst Richard Greenfield is ranked #988 out of 4,571 analysts. Greenfield has a 58% success rate and realizes 10.1% in his yearly returns. When recommending TWTR, Greenfield yields 3.5% in average profits on the stock.
TipRanks analytics show TWTR as a Hold. Based on 27 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on Twitter stock, 16 maintain a Hold, while 8 issue a Sell. The 12-month average price target stands at $14.73, marking a nearly 21% downside from current levels.