Macquarie 'More Optimistic' On Twitter, Still Neutral On Shares
Following Twitter Inc (NASDAQ: TWTR)'s Q4 2015 earnings release and call, analysts all along the Street are adding their voices to the mix, updating their ratings and adjusting expectations based upon the mixed results and guidance published Wednesday.
Ben Schachter, Macquarie analyst, took part in the ongoing discussion by issuing a note reevaluating Twitter post-quarterly results release.
Macquarie: Maintains Neutral Rating, Price Target Of $20
According to the analyst, the fourth-quarter results left many "waiting on a potential turnaround." However, Schachter opened by stating that the revenue came in flat compared to the firm's estimate, and EBITDA was approximately 11 percent above the estimate.
Citing "incrementally more positive" sentiments, Schachter was not shy to address the declining MAUs against the backdrop of having "never recommended the stock" and remaining Neutral through and through. "While many investors correctly focus on MAU growth, in our view, the key problem remains accessibility of its core service."
The analysts continued, "While there are many, many problems to fix, we think that management is recognizing the issues and is more clearly defining its roadmap to addressing them."
Related Link: Nomura: Twitter's 2016 Is All About Execution
Looking Ahead
Schachter then outlined a forward-looking suggestion, "Going forward, we think the simple fact that mgmt. is finally admitting it has a problem with the core is a key first step toward fixing it."
He elaborated, "We don't see a quick fix, but rather we expect to see incremental improvements continually throughout the year."
"The bottom line is that 2016 will be a critical year for TWTR. We think that it needs to fix its core usability/accessibility problems first. If it can do this before its content creators leave, ti will have a good shot at righting the ship."
The Specifics
Within the above context, Schacter reiterated the company's unchanged Neutral rating and price target of $20. While the EBITDA was increased by 14.6 percent to $711 million, the 2016 revenue estimate remained unchanged.
At the time of this writing, Twitter was trading down 5.07 percent on the day at $14.22.
Latest Ratings for TWTR
Feb 2016 | Barclays | Maintains | Equal-weight | |
Feb 2016 | Pacific Crest | Downgrades | Overweight | Sector Weight |
Feb 2016 | Mizuho Securities | Maintains | Buy |
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