The analyst believes Twitter will have trouble driving user growth and monetization
SunTrust Robinson Humphrey analyst Bob Peck has downgraded his rating on Twitter Inc. (NYSE:TWTR) from Buy to Neutral today. The analyst reiterated his $18 price target on the stock, reflecting 0.44% downside potential over the last close. The stock closed up 4.09% at $18.09 Friday.
The analyst said his research has showed that user engagement as well as user growth for the social media network still remained challenged through the quarter. Based on intensifying rivalry from Snapchat, limited new-product introductions, as well as challenges related to advertising, he believes Twitter’s user monetization does not have the potential to go far from where it stands right now. “With the stock at our $18 target and a lack of data points to merit increasing it, we are lowering our rating to Neutral,” Mr. Peck added.
Over the weekend, hacking group OurMine Security hacked into CEO Jack Dorsey’s Twitter as well as Vine accounts. This is the same group which previously hacked Twitter accounts held by Google CEO Sundar Pichai and Facebook CEO Mark Zuckerberg. They posted the same message via a tweet which they did in their previous hacks, which read that they were testing security. Users had then been advised to have two-factor authentication applied to their passwords for added security, to prevent such breach from happening again. Other related accounts such as Vine, Bitly, and Quora, which might have access to publish on Twitter, should also have two-factor authentication applied to their passwords.
The Street, as polled by Thomson Reuters, has four Strong Buy, eight Buy, 25 Hold, four Underperform, and two Sell ratings on Twitter. It also maintains a 12-month mean price target of $18.38 the stock, reflecting 1.67% upside potential over the last close. The stock plunged 2.32% below the last close, to $17.66 as of 7:51 AM EDT today.