In an interview with Fox Business, SunTrust Robinson Humphrey analyst Robert Peck provided his opinion on Twitter Inc (NYSE:TWTR), on which his firm has a ‘Buy’ rating and a price target of $58.
Twitter Inc (NYSE:TWTR)’s revenue and earnings per share were significantly above expectations and the stock was up 20% on Wednesday after the company announced its earnings the day before. Such a success have people wondering if Twitter Inc (NYSE:TWTR) is on a flight path and might even beat Facebook Inc (NASDAQ:FB).
Peck said that earnings for this quarter were a reflection point of Twitter Inc (NYSE:TWTR)’s potential. He said that the investor sentiment has gone from “very negative to more positive.” Twitter has got many components right, which drove this, such as increased monthly average users (MAUs) and average revenue per user (ARPU) being exceptionally high. He called this “a great quarter” for Twitter Inc (NYSE:TWTR), likening this quarter to that of Facebook Inc (NASDAQ:FB) in the last year.
The number of monthly active users for Twitter Inc (NYSE:TWTR) amounted to 271 million, beating the estimate of 266.8 million, but taking into account that Facebook Inc (NASDAQ:FB) has more than a billion users, it leads to a conclusion that these two cannot be compared yet.
The officials of Twitter Inc (NYSE:TWTR) have confirmed that Twitter Inc (NYSE:TWTR)’s total audience is two to three times bigger than the monthly active users, meaning that their reach includes both the active users who log in and tweet, and the users who see those tweets and read them without logging in.
Twitter Inc (NYSE:TWTR)’s second quarter of 2014 EPS was $0.02, which beat the estimate of $-0.01. “This quarter really broke the backs of the bears,” Peck said.
Given that news flow was high this quarter with all the major global events such as the World Cup, the question is whether Twitter Inc (NYSE:TWTR) might need to string two or three such excellent quarters to prove they have what it takes. Peck, however, feels that while these events helped, they were not the only deciding factors for Twitter Inc (NYSE:TWTR) this is why he keeps his bullish outlook on Twitter Inc (NYSE:TWTR).