Cantor analyst Youssef Squali is out today with a few insights on Twitter Inc (NYSE:TWTR), as the company is scheduled to report its fourth-quarter earnings results on Thursday, February 5 after market close. The analyst rates the stock a Buy with a $58 price target, which implies an upside of 54% from current levels.
Squali observed, “We expect TWTR to report strong results with revenue growth of nearly 100% Y/Y, the fastest in the group, driven primarily by monetization gains, although FX headwinds are likely. TWTR should continue to benefit from a surge in mobile, as advertisers shift their budgets in response to changing user behavior, while users (MAU) and engagement remain under the microscope. Monetization should continue to drive near-term results, but solid sequential growth in users and higher engagement will be key to drive the stock higher from here, in our view. Management hinted at the prospect of stabilization in user engagement in 4Q on the 3Q call.”
The analyst continued, “Our 4Q:14 revenue estimate is $463.3M (+90.9% Y/Y), slightly above consensus’ (FactSet) $454.0M estimate (range $441.8-475.9M) and above management’s range of $440-450M. With int’l at a third of revenue, FX is likely to be a headwind. We estimate EBITDA at $106.8M (23.1% margin), in-line with consensus’ $107.0M (range $100.8-126.1M), but above management guidance of $100-105M. We note that in 3Q:14, the company beat revenue/EBITDA expectations by 3%/28%, respectively. Our NEPS estimate of $0.01 is below the Street’s $0.06.”
Twitter, Inc. is a global platform for public self-expression and conversation in real time.