By Jordan Faigen 

It’s not breaking news that Twitter Inc (NYSE:TWTR) is struggling, but a ray of hope might have recently been spotted.

Twitter in the News 

Since Twitter’s latest quarterly report, investors have not been pleased with the company’s continued decline in user growth. In addition, the mounting concerns about the product have certainly not been assuaged by the recent departure of the company’s COO Ali Rowghani. However, Twitter’s 2013 acquisition of MoPub, the mobile-focused ad marketplace, might be the life-saver the company needs. Even though MoPub acts independently under Twitter, the pair works well together. MoPub helps Twitter promote tweets, and Twitter gives MoPub access to its user-base. This might be just the avenue Twitter is looking for in order to expand and change its business to stay alive.

A Financial Expert’s Perspective

Analyst Robert Peck of SunTrust Robinson Humphrey recently reiterated his BUY Twitter rating and $45 price target, noting the true value of MoPub. Peck argued, “we think Twitter’s MoPub exchange is one of its greatest assets, allowing clients to fill mobile inventory directly or through RTB [Real-time-bidding].” He added, “We believe that MoPub can be one of the few global mobile native ad exchanges that leverages identity based information, becoming very unique and valuable (only Google, Facebook and Apple likely rival its scale).” By 2017, Peck and team believe that MoPub could bring in more than $500 million in revenues. The key lies in the facts that MoPub can take advantage of Twitter’s user information and provide increased targeting, as well as the growing importance of real-time-bidding. Peck has recommended Twitter ten times with an 80% success rate and a +20.0% average profit on the stock.

Robert Peck’s Past Twitter Recommendations

In this week’s Throwback Thursday, we take a look at how Robert succeeded in recommending Twitter, helping him earn an overall +14.7% average return per recommendation and a 76% success rate of recommendations.

Twitter

Before Twitter’s IPO in November of 2013, Peck initiated coverage of the company with a BUY rating and $50 price target. Peck pointed out that, “Twitter is a real-time indication of people’s interests. It is both a broadcast medium and a communications tool that is positioned uniquely for real time engagement, by consumers and advertisers.” He also argued, “Twitter has ‘crossed the chasm’ with its scale of 215m+ users and think it provides a differentiated platform utility for consumers and advertisers.”

Shortly after the stock’s IPO, Peck reiterated his BUY rating on November 25. Peck noted, “Twitter filed its IPO as an emerging growth company under the JOBS Act, which means they will exit the quiet period after 25 days. Therefore, we expect positive information flow driven by a series of positive data points.” Peck was focused on the following expectations, “1) Research from underwriters is likely to be unveiled Dec 2 – we would expect the research will be positive and contain data that only the underwriters analysts had access to, 2) The company will be able to speak publicly, addressing any concerns investors have surfaced during the quiet period and adding any new positive data points, and 3) Typically after a quiet period, a company can meet with large institutional clients as well as other broker’s analysts which we think will provide more insight into current business trends.” At the time of this recommendation the stock was trading at $39.06, and by the time Peck made his next recommendation to HOLD the stock on December 16, the stock had jumped to $56.61.

Even though the stock has been on a slow decline since the beginning of this year, Peck recommended HOLD Twitter in February. He noted, “Twitter reported its first public quarter last night that beat expectations across the board and set guidance inline with our views. Revenues of $243m beat consensus by ~$20m and EBITDA of $45m beat our est. of $32m. The midpoint of 2014 FY guidance of ~$1.17b in revenues and $165m of EBITDA were inline with expectations and show growth of ~76% and ~120%.”

Most recently, Peck has changed his tune back to a BUY rating, even after the resignation of Twitter’s COO Ali Rowghani. Peck was not surprised by the announcement and believes that the company needs this change up in management. Peck noted, “Twitter has recently made several big moves in Product and Engineering (2 important areas he had been running). Google Maps executive Daniel Graf was recently hired to head Product (replacing Michael Sippey who left in January), while Twitter VP (Alexander Roetter) was recently promoted to head engineering (replacing Chris Fry). Recall, Mr. Rowghani only had product reporting to him for the last 6 months.” The stock has climbed from $36.79 at the time of this recommendation on June 12, to its current price today of $38.02.

Twitter might be struggling, but with the rearrangement of management and a new business path led by MoPub, Peck believes the company still has some life left.

To see the rest of Peck’s performance history, visit TipRanks today.

Jordan Faigen covers financial markets and the latest stock market news. She can be reached at [email protected]