Twitter: Color on QtrShares of TWTR hit an all time low in after hours ($31.39) but have bounced back to $33.
- Axiom Capital notes it is maintaining Hold rating on Twitter following the 2Q earnings report. Revenues and EBITDA were above consensus expectations, core MAUs were above flat growth estimate, and full year guidance was raised. The report refuted bearish forecasts that called for a decline in user growth and a possible reduction in guidance. The good news stopped there. On the call management stated that: 1) product enhancements such as Instant Timelines and logout experiences have had little impact on growing audience, 2) engagement (DAU/MAU) declined to 44% from 48% in the prior year, and 3) investors should not expect sustained meaningful growth in MAUs until marketing efforts kick in. No meaningful update on the CEO search was provided but we believe the board should act fast and preferably with someone outside of Twitter.
- Pivot Research notes TWTR reported solid 2Q15 business trends featuring revenue growth of 63% and adjusted EBITDA margins of 24%, both above guidance. Management's expectations for limited user growth were poorly received by investors, but firm continues to believe that the company's current user base remains more than sufficient for Twitter to continue building out the strong niche. Raises tgt to $42 from $41; reiterates Buy rating.
- Brean Capital notes Twitter reported a better-than-expected quarter last night, with both revenues and EBITDA substantially beating guidance and consensus estimates. MAU's ex SMS Fast were in line, with the co. highlighting that MAU scale growth will not occur until they do a better job of attracting mass market users and simplifying the product, causing some selling/reversal in the after-market. During the post earnings callback, the company addressed the market misinterpreting long-term MAU commentary, which was about becoming a billion user platform, as short-term guidance. In fact, the company said that they were not guiding for short-term MAU's, but that Q3 MAU's were showing a slight uptick vs. Q2'15 at this point in the quarter. Reiterating Buy rating.
