The last time Twitter (TWTR) reported quarterly results, the company missed on revenue expectations but beat on earnings (“EPS”). Analysts have a very underwhelming outlook for the company. In February, Morgan Stanley (MS) set a $10 target price on TWTR stock. Cowen and Company and Raymond James both downgraded it.
Last year, Twitter gave investors hope that it would grow active users, through the NFL streaming deal. In the last quarter, the company lost the deal to Amazon.com (AMZN), though it said it would still commit to live tv content. The failure to keep the NFL deal renewed shows just how competitive it is for sites to win exclusivity for content.
In the social networking space, Twitter is losing market share as Facebook (FB) and Snap, Inc. (SNAP) fight it out. In the last few months, Facebook added Snapchat-like features to its site, FB Messenger app, Instagram, and on WhatsApp. The war between the two sites will lead to advertisers spending more there than on Twitter.
Twitter’s valuations are still unfavorable. Though the stock trends near yearly lows, the only hope for Twitter is that a bigger company buys it out. Unless the microblogging site reports higher daily and monthly active users, the stock will languish.
