Sarah Roden

About the Author Sarah Roden

Sarah writes about stock market news for TipRanks. She graduated as member of Phi Beta Kappa from the University of Richmond in Richmond, Virginia.

Analysts Weigh in on Twitter as it Unrolls New Features

Twitter (NYSE: TWTR) is rolling out new features, some more quietly than others. The real-time social media platform has been trying to accelerate user growth for the past several quarters.

Last month, Twitter inconspicuously purchased Periscope, a video streaming application that has not launched yet. This signifies an expansion in Twitter’s potential video capabilities as the social media site continues to work on Vine; a video clip social platform acquired by Twitter in 2012. At a Morgan Stanley technology conference last week, Twitter CFO Anthony Noto commented, “When you think about syndication and how quickly that can disperse across the Internet having video integrated into the product is really important.”

Twitter’s new features include While You Were Away, which highlights the three most relevant tweets at the top of your timeline if you have been logged out of the service for more than 12 hours. Additionally, Twitter is working on a Logged Out Homepage, which will show interesting tweets to the 500 million browsers that land on Twitter every month but do not log in.

Additionally, Twitter has opened an office in Hong Kong. Even though Twitter is banned in mainland China, the company hopes to use the office to generate advertising revenue in Asia. Shailesh Rao, Twitter’s VP for Asia Pacific, commented, “We’re capitalizing on this growing trend where the most ambitious, entrepreneurial and successful Chinese companies want to go global, and we believe that Twitter is an essential way for them to connect and engage with the world. Opening our Hong Kong office… will contribute to our next phase of growth in Asia.”

According to SmarterAnalyst, Michael Graham of Canaccord Genuity reiterated a Buy rating on Twitter with a $56 price target on March 9th. After attending an investor meeting with Twitter’s management, Graham stated that the company “continues to deliver on key initiatives to enhance user and advertiser experiences.” He noted that progress on Twitter’s new features “is helping sentiment turn in Twitter’s favor, with the stock up ~13% in the past several weeks following Q4 earnings.” Graham concluded, “While the stock has less valuation support than close peer FB (BUY rated), we expect much more dynamic EPS growth from TWTR over the next few years.”

Michael Graham has rated Twitter 6 times since September 2014, earning a 60% success rate recommending the social media site with a +5.7% average return per TWTR rating. Overall, Graham has a 65% success rate recommending stocks with a +18.5% average return per recommendation.

On March 9th, analyst Doug Anmuth of J.P. Morgan maintained an overweight rating on Twitter with a price target of $67.Anmuth highlighted Twitter’s new products, such as “Video, Instant Timeline, While You Were Away, & the Logged-Out Homepage,” and notes that Twitter will evolve “beyond a text-based 140 character tweet platform into something much more engaging.” Anmuth believes these new features will “improve the user experience & increase MAUs over time,” even if the enhancements “take multiple [quarters] to play out.” The analyst continued, “While investor sentiment in the name has improved since 4Q earnings, we think considerable skepticism remains & Twitter’s risk/reward is very compelling.”

Doug Anmuth has rated Twitter 10 times since December 2013, earning a 60% success rate recommending the stock with a +5.7% average return per TWTR rating. Overall, Anmuth has a 73% success rate recommending stocks with a +26.6% average return per recommendation.

On average, the top analyst consensus for Twitter on TipRanks is Moderate Buy.

To see more recommendations for TWTR, visit TipRanks today.

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