Buy Twitter (TWTR) Stock on the Earnings Dip, Says Top Analyst
Has Wall Street gone a bit overboard punishing Twitter (NYSE:TWTR)? The social media titan’s share price continues to fall Monday on the heels of a disappointing quarterly report. Specifically, what sent the stock reeling was a decline in monthly active users, and a warning that the closely watched MAU total could dip again in the current quarter.
However, Aegis analyst Victor Anthony remains bullish on the stock, reiterating a Buy rating and price target of $40, which implies an upside of 23% from current levels. (To watch Anthony’s track record, click here)
Anthony commented, “According to Twitter, information quality initiatives led to a 1M contraction in MAUs and they expect a further mid-single digit decline in MAUs in 3Q18. While the quality initiatives are pressuring near-term MAU growth, we believe it ultimately drives longer-term MAU growth as confidence in the platform improves. Like with Facebook, we see these actions to improve the health of the platform instilling increased confidence in both users and advertisers towards Twitter. Ad partners continue to be positive on the platform, demand is increasing and ROI is improving. We would buy into the weakness and into the retail-driven ad rush in 4Q.”
“The market for Internet/Tech stocks remain choppy and there are regulatory risks across the Internet sector. However, user appetite for Internet companies and their consumption advantages, remains elevated, and the secular trends have not been altered. While there are some companies in the group with stronger fundamentals than others, the overall Internet sector is very healthy. Investors should continue to allocate capital to both public and private Internet companies,” the analyst added.
Overall, as far as the troubled bird’s verdict on the Street, it is a toss-up among analysts, as TipRanks analytics exhibit TWTR as a Hold. Out of 24 analysts polled in the last 3 months, 6 are bullish on Twitter stock, 13 remain sidelined, and 5 are bearish on the stock. With a return potential of nearly 13%, the stock’s consensus target price stands at $36.43.