Twitter Inc (NYSE:TWTR) shares have gotten a nice nearly 11% jolt today, with the social media platform both earning an upgrade and high praise from J.P. Morgan as a “top idea” of 2018 along with a new bull: Summit Redstone analyst Jonathan Kees.
Calling the comeback tech kid of the Street one to “watch” in light of “underappreciated turnaround developments,” the analyst initiates coverage on Twitter stock while setting a price target of $26, which implies a 5% upside from current levels. (To watch Kees’ track record, click here)
Kees’ advice to investors? “Get in early.” Is the market underrating the social media company’s turnaround? This analyst says yes, asserting: “To battle revenue and user base deceleration, Twitter has been in the midst of a reinvention as the company revamps its product, rolls out video, increases content, improves analytics, and reorganizes its sales force. We believe that now is the time to jump in as user growth and engagement traffic have stabilized and even started growing. We see 2018 as an opportunity for revenue pick-up given easier comps. […] We understand that the stock has had periods of underperformance but believe the market may not be giving enough credit to TWTR’s performance trends and turnaround and believe its relatively modest valuation provides sufficient reward/risk profile for coming in early on this speculative investment.”
Even the President has leaped to use Twitter to the point of some calling it an “addition,” as Kees pays attention to a company that has wedged its way into “an integrated and almost ingrained part of society and everyday life.” Worthy of note, tweeting has become syndicated in the dictionary as an acknowledged verb.
The real challenge facing this tech stock is fierce competition breathing down Twitter’s neck, with rivals of the likes of Facebook and Snap outpacing the company in user growth and Alphabet capturing more ad budget share. However, with recent strides forward in video, international gains, Snap’s market flops, and Kees’ recognition of a company that has been diversifying non-ad revenues, at the end of the day, the strengths seem to offset the risks at hand here.
TipRanks points to a less confident analyst majority opinion circulating the Street, with just 3 of 25 analysts bullish on Twitter in the last 3 months. The rest are split between the cautious and the bearish, with 16 neutral analysts and 6 bearish analysts running for the hills. With a loss potential of 21%, the stock’s consensus target price stands at $19.43.