Twitter pares gains a bit as both upgrades and downgrades arrive


8 firms have hiked their Twitter (TWTR +20.8%) targets following yesterday's big Q2 revenue beat and strong guidance, and 4 have upgraded. But the company has also caught downgrades from Evercore and Pivotal Research in response to its massive post-earnings gains.

"While Q2 demonstrated the ongoing success in commercial execution we have come to expect ... there was nothing thesis changing about the results," says  Pivotal's Brian Wieser, cutting shares to Sell. He adds that while margin trends are positive, Twitter has "affirmed no change to long-term goals."

JPMorgan's Doug Anmuth (Neutral) questions Twitter's ability to gauge the World Cup's impact on new user growth, and also notes 14% of MAUs stem from automated activity by 3rd-party apps.

Others are more positive, moreso due to improving monetization than user growth. Cowen, which has upgraded to Market Perform: "While engagement and valuation still concern us, product improvements and new ad units coming to market (e.g. app installs) should drive monetization benefits."

RBC (Outperform): "We’d argue that TWTR’s 'mainstreamization' efforts have still only recently begun. There’s a lot more Twitter can do here ...  And the [Facebook] historical monetization and margin ramps provide a clear roadmap for where TWTR’s P&L can go."

Prior Twitter earnings coverage

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Comments (1)
  • june1234
    , contributor
    Comments (4472) | Send Message
     
    Using GAAP, dump non GAAP accumulate. Take your pick. This one is the new AMZN. FB is still printing money so I wouldn't bet against these guys
    30 Jul 2014, 03:19 PM Reply Like
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