Twitter: Tapped Out Or Just Getting Going? Deutsche Bank Thinks The Latter
In a research report released today to investors, analyst Ross Sandler of Deutsche Bank reiterated a Buy rating on Twitter Inc (NYSE:TWTR) with a price target of $60, which represents a potential upside of 12% from where the stock is currently trading.
Sandler noted, “In summary, while some of the renewed confidence is starting to be priced into TWTR shares since 2Q results, wSentiment on TWTR shares has started to rebound post lock-up expiration, and while investors are becoming more comfortable with the “logged-in” MAU and revenue trajectory, we sense a general lack of clarity around the “logged-off” opportunity. At $38B in market cap, we think investors are paying 5.7x 2017 revenue (14x EBITDA) solely for the loggedin experience if we assume parity to FB’s current mobile NF ad load, and analogous ad prices (which seems conservative). If TWTR can increase its centrality to mobile content discovery and execute on logged-out (a big “if”), it could add potentially double revenue and overall market cap, based on our math below.”
The analyst concluded, “In summary, while some of the renewed confidence is starting to be priced into TWTR shares since 2Q results, we remain in the bull camp and see it as one of the best ways for investors to play the rapid growth in mobile.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ross Sandler has a total average return of 14.4% and a 65.5% success rate. Sandler has a 21.7% average return when recommending TWTR, and is ranked #130 out of 3318 analysts.