Victor Anthony of Topeka Capital Markets has recently discussed with CNBC’s Melissa Lee how Twitter Inc (NYSE:TWTR) is showing a monetization upturn and signs of growth.
According to Anthony, he thinks the stock reaction the market saw several months ago was just Twitter Inc (NYSE:TWTR) getting ahead of itself and that the stock has now had a correction that’s tied to the current market environment for overall high-growth, high-multiple stocks.
Furthermore, he noted that investors may have been carried away just looking at user growth for the company. Twitter Inc (NYSE:TWTR) has seen in recent months a slowing of user growth in key markets such as the U.S. Because of this fixation, people are not seeing the signs of growth and the increase in monetization at the company. The analyst told Lee:
“I think Investors have been overly fixated on user growth for Twitter and they’re missing what some of these analysts have been talking about over the past week or so [and that]is the fact [that]this is a highly monetizable platform. Twitter today is really monetizing, it’s in early innings from a monetization perspective. They’re monetizing at a per user basis at a roughly 50% discount to Facebook. I see that gap narrowing over the next three years.”
He added that in a call with a marketing manager, he was told that Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) are not fundamentally different from an advertising and monetization perspective. He said:
“So whatever Facebook does, Twitter could ultimately do. I think, what you see happening over the next several years, the ad revenues increase and you see rising monetization on the international side as well.”
Furthermore, he told Lee that he still thinks that Twitter Inc (NYSE:TWTR) will get to his price target by the end of the year, “which is roughly $60”.