TWTR
There's no change to our fundamental thesis. We're just trying to avoid repeating the same mistake that we made into the 2Q print. Mgmt has recently found religion in managing expectations, and while we're expecting upside to 3Q18, we should have known that mgmt wasn't going to guide to it, and probably won't do so for 4Q18 either. For context, TWTR produced accelerating revenue growth in 2Q18 after guiding to decelerating growth at the mid-point of its 2Q guide. And it did so despite a sudden surge in the USD immediately following the 1Q18 print, so we suspect mgmt was aiming to beat the high end of its implied revenue guide. On the 1Q18 print, TWTR beat the high end of its implied top-line guide by 8 percentage points, but concurrently tempered its outlook for the remainder of the year, suggesting that sequential revenue growth through 2018 would mimic that of 2016...the year it restructured. Remember that chasing lofty consensus estimates is what ultimately led to TWTR's restructuring (see decks below for context), so mgmt's caution here is unfortunate but understandable. As we mentioned on our last call, we were already cautious heading into 2019 given that the series of exogenous 2018 tailwinds that complimented our long thesis (Olympics, World Cup, Mid-Term Elections) will not repeat next year, which will be a drag on 2019 growth. We're moving TWTR to our Long Bench for now.
TWTR 2018 DECKS & REPLAYS
- INTERNET | BEST IDEAS MID-YEAR UPDATE | 6/28/2018 | CLICK HERE
- TWTR | BEST IDEA LONG | 1/3/2018 | CLICK HERE
See the decks/replays above for supporting detail/analysis on our fundamental thesis. Let us know if you have any questions or would like to discuss further
