At least 8 firms have slashed their Twitter (TWTR) PTs following a Q1 report that featured underwhelming full-year guidance and failed to dispel concerns about slowing MAU/Timeline view growth.
"Over the medium term, we continue to expect Twitter's stock to underperform the market in the face of (what is likely) a multiple quarter transition on user engagement & ad product adoption," says UBS' Eric Sheridan (Sell, $35 PT). He's also (unsurprisingly) worried about a May 6 lockup expiration that will allow 84% of basic shares to be sold.
Topeka's Victor Anthony (Buy, $60) is more optimistic. "We reckon that we are witnessing Facebook part two. Instead this time it is faster user growth that investors are seeking rather than faster mobile monetization." Cowen's John Blackledge (Underperform, $26) isn't convinced. "These results appear to confirm our suspicion that Twitter's total addressable market is fundamentally smaller than Facebook."
On the CC (transcript), CEO Dick Costolo talked up the value of a new integrated bidding system that will allow advertisers to bid across multiple ad types, and noted MoPub's ad network now reaches 1B Android/iOS users. CFO Mike Gupta mentioned "ad engagements" rose 28% Q/Q, but added cost per ad engagement fell 20%. He also stated non-GAAP costs/expenses rose 104% Y/Y.
When questioned about softening Timeline views per MAU. Costolo suggested the figure paints an incomplete picture, given Twitter's efforts to improve engagement per Timeline view. He defended his point by noting favorites/retweets were up 26% in Q1.