Twitter user growth stalls as revenue slides

  • Twitter user growth stalls as revenue slides

Twitter user growth stalls as revenue slides

That was enough to beat Wall Street's forecast but still represented a five percent loss year-over-year and did little to sway investor opinion. Twitter's 625 live video events reached 55 million unique viewers, an increase of 22% sequentially from the first quarter. "MAUs are expected to increase by 3M sequentially (vs. the surprise bump of +9M in 1Q17) to 331M ending MAUs (+5.6% Y/Y)". In the year-ago quarter, the company's adjusted EBITDA was $175 million with a margin of 29%.

We believe that using traditional valuation metrics, Twitter is ridiculously overvalued. The company has long associated user growth with a path to revenue growth, particularly as it tries to gain its footing in the digital advertising space. Also, insider Robert Kaiden sold 2,815 shares of the company's stock in a transaction on Thursday, June 1st. In Q1, Twitter's cost-per-engagement declined 63%. Average DAU for a period represents the number of DAUs on each day of such period divided by the number of days for such period.

"Twitter just has not found a path to monetize the ad stuff effectively". Barclays PLC reaffirmed an underweight rating and issued a $15.00 target price on shares of Twitter in a research note on Wednesday, July 12th. The FactSet consensus was for 328.8 million.

If and when Twitter hits a ceiling on how many people it can sell to advertisers, its advertising business is going to take [another] hit. Mosaic Family Wealth LLC raised its stake in Twitter by 14.2% in the first quarter. That's less than half Facebook's (FB) $4.55 figure.

Even if Twitter didn't add any new users, being able to boast 328 million monthly active users is still pretty impressive. For the full year, it expects non-GAAP expenses to be down by 3% to 6% year over year.

"We're also encouraged by the progress we're making executing against our top revenue generating priorities as we focus on making Twitter the best place to see and share what's happening, where you can see every side and perspective". But monthly user growth was offset by "lower seasonal benefits and other factors". We also would like to see a full-time CEO for the company as the current situation urgently needs this kind of leadership. Aegis restated a "sell" rating on shares of Twitter in a report on Sunday, April 2nd.

Disclosure: I am/we are long TWTR. And the company's stock slide isn't a long-term trend-yet.