Twitter Inc (NYSE:TWTR), the free microblogging service, is baffling analysts and investors alike with its expensive stock price. Since the company’s IPO back on November 26th, Twitter Inc (NYSE:TWTR) has more than doubled its original $26 price tag. The most recent increase follows the announcement of new advertisement plans, but many analysts are still confused about the share’s valuation and exactly what do with the stock. Some analysts are not willing to take the risk anymore on Twitter Inc (NYSE:TWTR), while others recommend hanging on for the ride.
Macquarie analyst Ben Schachter believes that Twitter Inc (NYSE:TWTR) has a “bright future and many opportunities ahead,” but added, “nothing has changed over the last 15 days to justify the rise in valuation.” While Ben might believe that Twitter is a strong company, he feels that the current stock price is not warranted and that it is best to get rid of shares. Ben is ranked 212 out of 2308 analysts and has a 4.9% average return over S&P-500.
Analyst Blake Harper also recognizes Twitter’s growth as a leading social media company, but does not feel that the company is worth the risk. Twitter’s sales growth is outpacing Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOG) and Blake even goes as far as to say that “the stock has graduated to cult status.” Blake also notes, “While the company is growing revenues faster than its fastest-growing peers and we do recognize the potential for the company to capture larger portions of the mobile and TV advertising market, it appears valuation metrics are irrelevant and that investors are betting aggressively on Twitter being the next great media-technology platform.” But most importantly Blake does not “believe the current valuation justifies the risk. Especially with the company having yet to report a quarter as a public company.” Blake recommends SELL Twitter with a $34.00 price target. Blake is ranked 1012 out of 2308 analysts and has a 50% success rate of recommended stocks.
On the other hand, BMO Capital analyst Daniel Salmon recommends to HOLD TWTR due to his excitement about their social TV advertising. “Valuating at these levels requires a close eye on user growth and Twitter Inc (NYSE:TWTR) has unique opportunities (like its real-time and transparent nature’s appeal to younger audiences) and challenges (a more chaotic nature that can drive some users away.)” Daniel is ranked 293 out of 2308 and has a 4.0% average return over S&P-500.
140 characters might not seem like a big deal, but Twitter Inc (NYSE:TWTR) has skyrocketed to the “it” stock, confusing analysts and investors. Many analysts believe the stock is overvalued and recommend SELL, while others are still on the fence and are HOLDing to see what happens. To see additional analyst recommendations about Twitter, and other stocks, download TipRanks now and start making informed financial decisions today!