Twitter Inc (TWTR) Earnings Preview: Which Analysts Are Most Accurate?

Twitter Inc (TWTR) Earnings Preview: Which Analysts Are Most Accurate?
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While posts consist of only 140 characters, Twitter Inc (NYSE:TWTR) is one of the most talked about, and argued, stocks around.

With Twitter Inc (NYSE:TWTR)’s Q4 earnings report expected on February 5th after the closing bell, top ranked analysts are weighing in now of what to do with the TWTR stock in order to maximize return.  However, these two five-star analysts, Mark Mahoney from RBC Capital and Youssef Squali from Cantor Fitzgerald, have two varying opinions: Mark Mahoney says BUY while Youssef Squali says SELL; meaning that only one will walk away with an increased success rate and average return from this stock recommendation.


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Mark Mahoney sees potential in Twitter Inc (NYSE:TWTR) and recommends BUY TWTR, explaining that Twitter will continue to close a “monetization gap” with Facebook Inc (NASDAQ:FB) due to the fact that “Twitter monetizes its users at a much lower rate than Facebook, but is steadily closing this gap. In Q3:13, Twitter grew its monetization 61% Y/Y compared to Facebook at 40%.”

Furthermore, Mark lays out three points to better explain his BUY rating: “1: The Twitter advertising platform is improving; No. 2: Twitter Inc (NYSE:TWTR) advertising spend is likely to increase – 60% of Twitter advertisers expect to increase their budget in the next year; No. 3: Twitter has significant ad growth spend potential – 83% of advertisers surveyed use Facebook as a marketing channel, while only 71% use Twitter.”

While Youssef Squali is also expecting “very strong results” in TWTR’s earnings report, he still recommends SELL because he expects some deceleration in trends: “We’re modeling for ad growth of 115.3% Y/Y, to $214.1M in 4Q:13, representing only slight deceleration from the +123.5% Y/Y growth reported in 3Q:13. Considering FB’s 4Q:13 results, which showed accelerating ad revenue growth (76% Y/Y vs. 66% in 3Q:13), we may see a similar pattern out of TWTR…  Similar to Facebook, we believe this mobile contribution will continue to power overall growth.”

(Important to note: Looking at Squali’s rating history, we see that he also recommended SELL TWTR on January 8th.  This recommendation resulted in a loss of -15%. Mark Mahoney’s last recommendation regarding TWTR was a BUY rating on December 13th, which resulted in +12.7% gain)

Two similar assessments, but two very different recommendations.  Whose recommendation will reign supreme? We will have to wait until later this week to find out.  But be sure to continue following Twitter Inc (NYSE:TWTR) recommendations from top ranked analysts by downloading TipRanks today!

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