Twitter Inc (TWTR): The Work Gets Harder From Here


BMO Capital analyst Daniel Salmon is out today with a research note on shares of Twitter Inc (NYSE:TWTR), after the social media giant topped the Street’s expectations in the fourth quarter, and for the first time posted a real profit, a milestone in CEO Jack Dorsey’s turnaround effort.

The analyst reiterates a Market Perform rating on TWTR stock, while raising his price target to $28, which represents a potential downside of 9% from where the stock is currently trading.

Salmon wrote, “As Twitter announced its first quarter of GAAP profitability, we think a clearer strategy is in place for continued revenue momentum in 2018, stemming from video (live content and DR ad products) and the use of AI in the feed to help grow mainstream adoption. If Twitter can keep costs in check, we believe the story could become more interesting as top-line pressures fade, but we also believe the work gets harder from here as low-hanging fruit has been picked and FB still looms large.”

“We increase our 2018 and 2019 revenue estimates due to the 4Q17 beat, higher international MAU growth estimates, and the improved monetization prospects with DR video card products. As a result, our adjusted EBITDA estimates come up. Our non-GAAP EPS come up to $0.50 from $0.35 in 2018 and to $0.53 from $0.43 in 2019 as a result,” the analyst added.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Daniel Salmon has a yearly average return of 15.9% and a 70% success rate. Salmon has a average return when recommending TWTR, and is ranked #192 out of 4728 analysts.

Out of the 34 analysts polled in the past 12 months, 6 rate Twitter stock a Buy, 20 rate the stock a Hold and 8 recommend Sell. With a downside potential of 15%, the stock’s consensus target price stands at $26.39.