Below is a chart and brief excerpt from today's Early Look written by Communications analyst Andrew Freedman.
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.