Jefferies Weighs In on Twitter Inc (TWTR) Following Fabric Deal


Jefferies analyst Brian Fitzgerald is out today with a few thoughts on Twitter Inc (NYSE:TWTR), following the news that Alphabet Inc (NASDAQ:GOOGL) is taking over Twitter’s mobile app developer platform Fabric, as well as its Crashlytics crash reporting system, Answers mobile app analytics, Digits SMS login system and FastLane development automation system.

Fitzgerald wrote, “Since @jack’s return there has been a focus on a leaner and more nimble Twitter with a focus on the core product offerings. We view this transaction as a continuation of this focus and streamlining operations to allow Twitter to innovate and deploy updates rapidly. In October Twitter announced it would reduce its headcount by up to ~336 or ~8% of the total workforce.”

“In 3Q16 Twitter reported a return to growth in MAU Q/Q with a reported 317MM MAUs. Heading into the 4th quarter, consensus expects MAUs of 318MM. Top line growth is expected to continue as the Street looks for top line growth of ~4% to $740MM. We will be interested to hear any statistics around engagement of the live streaming offerings and how TWTR is working to better monetize these properties,” the analyst added.

Fitzgerald reiterated a Buy rating on shares of Twitter, with a price target of $23, which represents a potential upside of 36% from where the stock is currently trading.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian Fitzgerald has a yearly average return of 12.5% and a 68% success rate. Fitzgerald has a -39.6% average return when recommending TWTR, and is ranked #182 out of 4355 analysts.

Out of the 40 analysts polled by TipRanks, 5 rate Twitter stock a Buy, 26 rate the stock a Hold and 9 recommend a Sell. With a downside potential of 0.6%, the stock’s consensus target price stands at $16.79.

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