Twitter appears to be losing the confidence of investors as the company’s stock hits new lows today. Analysts at Mizuho Securities initiated coverage with a bearish conviction on the microblogging company.
The stock price of Twitter declined more than 3% to $19.02 per share at the time of this writing, around 1:08 in the afternoon in New York. In fact, Twitter shares dropped as low as $18.57 per share earlier today.
Over the past 52 weeks, Twitter shares declined from its highest level of $53.49 per share to its current trading price. The microblogging company lost more than 52% of stock value over the past year.
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In a note to investors, Neil Doshi, an analyst at Mizuho Securities said they believe that Twitter is a unique online asset because of the fact that it has the pulse on real-time data, expression, and sharing.
However, the analyst said the microblogging company “failed to communicates its value to the broader user base.” They also noted that Twitter struggled to execute its products in the past while the competition for incremental ad dollars continues to strengthen.
According to Doshi, they will only become positive on the stock if the microblogging company can sustain its user growth, better product execution, and margin improvement.
Social media ranking deteriorating
Furthermore, Doshi indicated that they were discouraged by the results of its recent survey on social media use on mobile devices, which showed that the usage for Twitter’s social media ranking was deteriorating.
“In June 2015, our 1,000+ person survey of U.S. mobile users indicated that Twitter was the third most popular social app. In November 2015, our 1,000+ person survey indicated that Twitter declined in the rankings, coming in behind others that included Facebook, Instagram, LinkedIn, and Pinterest,” five weeks after the launching of Moments, according to the analysts.
Mizuho Securities issued a Neutral rating on Twitter’s stock with a price target of $21 per share.
Brian Nowak, an analyst at Morgan Stanley reiterated his Sell rating on the stock and reduced his price target from $22 to $18 per share, one of the lowest price targets on Wall Street.
Nowak said, “Our third party data sources indicate weak app downloads in 4Q:15 (down ~3% YoY) despite a national TV ad campaign and the “Moments” push. This in our view speaks to continued gross addition struggles at Twitter. Our data also indicate declining engagement as mobile time spent is still falling over 20% YoY. While 4Q saw some improvement (potentially from Moments) it is telling that time spent per user is still declining 20%+…now for 5 consecutive quarters.”
Other Wall Street analysts remain cautious on the microblogging company. Most of them covering the stock have Neutral or Hold ratings.