Twitter May Struggle to Replicate Bumper 2020 Growth: Analysts

Twitter will battle to duplicate a bumper 2020 dominated by the US political battles, civil unrest, and the COVID-19 disaster as folks enterprise out following vaccine rollouts, Wall Avenue analysts mentioned on Friday.

The lifting of restrictions as folks get vaccinated has largely seen benefiting different digital advert corporations equivalent to Facebook and Alphabet’s Google whose shares soared after reporting blockbuster outcomes this week.

Not so with Twitter. Shares sank greater than 12 % on Friday after the social media firm reported first-quarter revenue and person numbers principally in keeping with analyst estimates and warned the present quarter may very well be its worse because it eyed a weaker 2021.

“The corporate’s weak future steerage means that repeating this efficiency will probably be extraordinarily troublesome,” mentioned Haris Anwar, senior analyst at Investing.com, including that extra folks will look to interact in offline actions because the vaccine rollouts choose up.

Though different tech firms have warned of a drop in customers this yr, they’re nonetheless upbeat on advert spending as entrepreneurs attempt to goal customers desirous to spend and journey after being locked indoors for over a yr.

“Twitter would not appear effectively positioned to really seize probably the most dynamic a part of the digital promoting financial system as they lack each enough scale of customers and the primary social gathering knowledge indicators that entice efficiency primarily based entrepreneurs,” mentioned Michael Nathanson, senior analysis analyst at MoffetNathanson.

A vow to deal with new merchandise and options by Twitter did little to allay investor considerations on Friday.

Nevertheless, some analysts discovered the corporate’s current-quarter income forecast conservative as they count on newer app options and return of stay occasions to spice up person engagement and monetisation in coming months.

At the least eight brokerages lower their worth targets on Twitter after the corporate forecast tepid income development for the second quarter.

Of the 40 analysts overlaying the inventory, 29 have a “maintain” or decrease ranking and the remainder have a “purchase” or greater ranking. The present median worth goal on the inventory is $70, as per Refinitiv knowledge.

© Thomson Reuters 2021