Below is a chart and brief excerpt from today's Early Look written by Communications analyst Andrew Freedman.
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In January, we reiterated our long call when the stock was down on concerns over the Trump ban (Click Here for The Pitch). We argued that Trump leaving Twitter was a net positive for brand safety and wouldn't meaningfully impact user growth (the mobile app download data suggested user growth accelerated in January!). We highlighted a favorable near-term catalyst set-up with upside to Q4 estimates on accelerating growth and an analyst day on 2/25. After-the-close yesterday, Twitter reported revenue growth +28% YoY (Advertising revenue +31% YoY) - above our estimate of 25% and well above the street at 17%. We think this is just the beginning. We expect the multiple to re-rate higher as growth initiatives gain traction, getting us to a $100+ stock on a tail duration. We are particularly excited about Twitter’s move into social-audio with “Spaces” and its potential to drive engagement and grow their user-base. |
