Twitter Inc (TWTR)’s official initial public offering date has not yet been announced, but already analysts are weighing in on the company. After a handful of reports from various analysts on the company, SunTrust Robinson Humphrey analyst Robert Peck seems to be the first to officially initiate coverage on Twitter (via Benzinga).
Twitter receives a Buy rating
Peck gave Twitter Inc (TWTR) a Buy rating and a $50 per share price target. He assigned a forward multiple of 16 times based on revenue and a forward multiple of 80 times on earnings before interest, taxes and amortization.
At the end of October, the value investor Mohnish Pabrai gave a presentation and took part in a Q&A session at Boston College and Harvard Business School on the Uber Cannibal Investor Framework, which he has developed over the past decade. Uber Cannibals are the businesses “eating themselves by buying back their stock,” the value Read More
Instead of looking at Twitter as an advertising platform like Facebook Inc (NASDAQ:FB), he examined it as a real-time tool showcasing its users’ interests. He sees the company as being aptly positioned to be useful in polling and also communication.
He also highlighted on Twitter Inc (TWTR)’s revenue, which he expects to have 100 percent growth. He believes that the micro-blogging site’s 215 million active users shows that it has matured to the point of experiencing continued revenue growth.
Details about Twitter’s IPO still unknown
Even though the company filed its S-1 declaring its intention to have an IPO, there are still many details we don’t know yet about Twitter’s offering. The company did not officially state which exchange it plans to list with, although there were reports in September that the company had selected the New York Stock Exchange. Some are speculating that the IPO could be held as soon as early next month.
At this point investors should be aware that the company is still in its growth phase. Its financial statements indicate that it is not yet profitable. However, unlike Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOG), Twitter’s user base is growing very rapidly. This makes the company’s IPO attractive to some investors, but possibly too risky for others.