uploads/2018/07/TWTR-valuations-1.png

Can Twitter’s Stellar Rally Continue?

By

Updated

Twitter’s stock has more than doubled over the last year

Social media company Twitter (TWTR) has finally delivered major gains for its investors. The stock is up 111% over the last 12 months. However, this rally may be running out of juice. While the company has done well to make key changes to its platform, which have caused its ad revenue growth to rebound, most of the optimism about the company already seems to be reflected in its stock price.

While the company’s daily active user count is still seeing decent growth, its monthly active users (or MAU) have been stagnant over the last several quarters. In fact, that number is up just 10% from the fourth quarter of 2014. Twitter’s MAU currently stand at 336 million.

Analysts are slowly turning bearish on Twitter stock

The coveted young demographic group prefers Snap’s (SNAP) Snapchat, or Facebook-owned (FB) Instagram, which now has one billion MAU. Meanwhile, Facebook’s overall revenue growth is easily outpacing Twitter’s.

Twitter stock was downgraded recently by Macquarie’s analyst Benjamin Schachter from “buy” to “neutral.” Schachter has a price target of $42 on the stock. Bank of America is more bearish on the stock. The firm has an “underperform” rating on the stock with a price target of $27.

Currently, the stock is trading at around $43.4. Nine Wall Street analysts have a “buy” rating, eight analysts are recommending a “sell,” while 21 have a “hold” rating.

More From Market Realist