Shares of Twitter Inc. took off on Wednesday after the social media company’s fourth-quarter results and comments on the outlook helped ease concerns about how the service will fare in the new reality.
For the first quarter, the company expects a 20% growth in its monetizable daily active user count, a projection that “mostly mitigated” fears of a user exodus following the company’s decision to ban former President Donald Trump from the platform, wrote Bernstein analyst Mark Shmulik.
“Twitter TWTR,
he’s bigger than a single man, ”Shmulik continued, emphasizing the management team’s point that 80% of Twitter’s audience comes from outside the US He has a market performance rating for the stocks and raised its price target at $ 65 from $ 52.
Shares of Twitter were up 8.7% in morning trading and were on track to close at a new seven-year high. The stock is heading for an eighth consecutive gain and is on track for its best eight-day stretch since the period ending February 16, 2018, according to Dow Jones Market Data. Read more about Twitter’s fourth quarter results.
Twitter “has long faced criticism for not providing as detailed guidance as some of its peers,” wrote Pivotal Research Group analyst Michael Levine, who “found the highest level of transparency extremely encouraging.” He commented that the Twitter management team “led with an arrogance and a confidence that we had not seen in a long time.”
Levine has a buy rating on Twitter’s stock and raised his price target to $ 77.25 from $ 67.
MKM Partners analyst Rohit Kulkarni highlighted Twitter’s revelation that its increase in absolute average daily monetizable active users during January was above its historical average for the past four years, suggesting to Kulkarni that the ” Trump’s ban is behind Twitter. ”
Kulkarni reiterated a buy rating and raised his price target to $ 73 from $ 60 in a note titled, “This bird is ready to go and fly smoothly in a post-Trump era.”
Trump’s impact aside, others were less convinced of the company’s prospects. “Even in the strongest quarter we can remember in the digital advertising market, Twitter is worth noting. [average revenue per user] it was only up 7% year-on-year, ”wrote Kevin Rippey, an analyst at Evercore ISI. “Compare this to FB FB,
+ 27% on the same metric and SNAP SNAP,
+ 62% “.
Rippey said that while a common argument for Twitter bulls is that the company has an attractive long-term opportunity ahead if it solves its challenges with monetizing its user base, he saw “little evidence in the Q4 result or in future prospects suggesting underlying organic trends have flexed. “
He maintained an online rating on the stock while raising his price target to $ 50 from $ 40.
Raising his target price on Twitter shares to $ 58 from $ 48, Cowen Equity Research analyst John Blackledge pointed to the company’s user growth.
“It has been consistently in the low double digits, and we expect DAUs to grow modestly through 2026.” More importantly, it forecasts that Twitter will grow slightly above digital ad rates worldwide over the next five years.
UBS analyst Eric Sheridan, equally enthusiastic about Twitter’s prospects, raised his price target to $ 60 from $ 52 in a note Thursday titled “Flying Into Analyst Day.”
“We haven’t heard the tone of Twitter on an earnings call sound that good for as long as we can remember,” Deutsche Bank analysts said as they raised their price target to $ 76 from $ 65.
Twitter shares have gained 52% in the last three months as the S&P 500 SPX,
it has risen 9.6%.
Contributing: Jon Swartz