Top analysts today offer an overview of what to expect from internet names such as Twitter Inc (NYSE:TWTR) and Amazon.com, Inc. (NASDAQ:AMZN) as the earnings season gets underway.
Cantor analyst Youssef Squali reiterated a Buy rating on shares of Twitter, with a price target of $45, as the company is scheduled to report quarterly earnings on February 10. Furthermore, the analyst also provided commentary on the announcement that four Twitter vice presidents are leaving the firm.
Squali wrote, “We believe news of several senior executives leaving Twitter, which broke over the weekend, is adding to lethargy around the name. This is not good news for a company in the midst of a turnaround, indicating perhaps that this turnaround is likely to take longer, but we believe this may also encourage potential bidders to step forward. Twitter’s current valuation, its unique offering and sizeable user base makes it a strategic asset for a number of potential buyers, be they technology or media companies.”
The sell side analyst reported his expectations regarding the upcoming earnings noting, “We’re modeling for revenue to increase 48.0% Y/Y to $708.9M (vs. cons’ $710.0M and guidance of $695-710M) mostly on improved monetization, and EBITDA of $182.1M (vs. cons’ $174.7M). Our total active users at 321M reflects flat net adds for the quarter (as of 12/31) and is below consensus’ 325M. Given recent departures and channel checks, which show a lack of traction on visitation/engagement, we could see the first negative net adds quarter for Twitter.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Youssef Squali has a yearly average return of 14% and a 56.9% success rate. Squali has a -24.3% average return when recommending TWTR, and is ranked #25 out of 3608 analysts.
Out of the 44 analysts polled by TipRanks, 19 rate Twitter stock a Buy, 22 rate the stock a Hold and 3 recommend a Sell. With a return potential of 102%, the stock’s consensus target price stands at $34.55.
In addition, Piper Jaffray analyst Gene Munster reiterated an Overweight rating on shares of Amazon, with a price target of $800, as the company is expected to report fourth-quarter earnings after the close on Thursday, January 28.
Munster noted, “We are bullish on AMZN into the Dec-15 quarter based on 1) concerns over margin compression returning from AWS & fulfillment expansion are misunderstood, 2) Street estimates are mis-modeling margin expansion in 2016, and 3) unit growth will likely exceed expectations (see pages 2-12 for details on each thesis component). It’s important to note Amazon can invest in the business and expand margins, with our analysis showing that 2015 was not a light year in Amazon’s trajectory, yet it expanded operating margins by ~240bps. We view this as an attractive entry point for investors.”
According to TipRanks.com, analyst Gene Munster has a yearly average return of 18.3% and a 58% success rate. Munster has a 33% average return when recommending AMZN, and is ranked #6 out of 3608 analysts.
Out of the 45 analysts polled by TipRanks, 38 rate Amazon stock a Buy, while 7 rate the stock a Hold. With a return potential of 16%, the stock’s consensus target price stands at $692.31.