Twitter Inc (TWTR): What Is The E-Commerce Potential?

Updated on

Twitter Inc (NYSE:TWTR) – What if you could tweet and buy those new shoes at the same time without leaving the comfort of the micro-blogging website?

Recent speculation about a partnership between Stripe, a company that allows people to pay for items without leaving the site a person is on at the time of checkout, and Twitter Inc (NYSE:TWTR) has analysts talking about the possibility of expanding Twitter’s online power. The possible arrangement with Stripe would allow Twitter users to make purchases from within tweets, expanding Twitter into the sphere of e-commerce. Even though a deal has not yet been finalized, some analysts are wary about Twitter’s ability to transition out of its current communications role and into an e-commerce facilitator, recommending SELL TWTR. However, there are also analysts who believe that Twitter still has a lot of room to grow, recommending BUY Twitter Inc (NYSE:TWTR).

With the recent rumblings of this new partnership, Morgan Stanley analyst Scott Devitt is ready to SELL TWTR. While the idea of embedding the ability to purchase within the current sale page might be revolutionary, Scott does not think that Twitter will be able to handle such a drastic change in its role. “Twitter will find it hard to transform itself from a product for a niche audience to a legitimate money-making business.” Twitter’s shares have already fallen 8% since January 2 and Scott is ready to SELL. Scott has a 2.8% average return over S&P-500 and a 60% success rate of S&P-500.

However, Stifel Nicolaus analyst Jordan Rohan believes Twitter has the potential to be more than just a chat website. Jordan recommends BUY TWTR with a price target of $75. Jordan argues that, “Twitter is the most powerful, flexible, and disruptive of the social media platforms, giving it significant scarcity value.” And Jordan, unlike Scott, is focused on Twitter’s ability to grow its user base. “With only 232 million users, versus Facebook’s 1.2 billion, Twitter has years of user growth ahead.” Adding, “Twitter is a predominantly mobile platform that is pervasive in media and pop culture. The ad platform is still in its infancy, and we estimate ad revenues will be able to grow six-fold over the next four years.” Jordan has a .1% average return and a 49% success rate of recommended stocks.

Jordan strongly believes in getting involved with Twitter, advising BUY TWTR, because of its potential for growth, while Scott fears that the company cannot grow out of its current position and advises SELL. But before you follow either analysts’ advice, be sure to review their performance profiles in order to know who to trust. Download TipRanks to follow analyst recommendations about Twitter, and other companies, and start making informed financial decisions today.

Leave a Comment