Twitter stock fell after MoffettNathanson lowered its price target
Twitter (TWTR) stock fell 3% on June 13 after MoffettNathanson analyst Michael Nathanson reiterated his “sell” rating on the stock. The analyst lowered his price target from $28 to $25. Twitter is currently trading at $36.2 per share.
Nathanson cited an elevated valuation on the stock after it rose 31.9% year-to-date as of June 12. Investors have taken a liking to the stock now that the company has been posting profits on a consistent basis for the last two years. The company’s growth is slowing, however, as its monthly user base has plateaued. Nathanson said that his long-term outlook for the company in the US isn’t good, as its user base may be maturing.
Twitter looks slightly expensive
However, the company, which now only reports mDAUs (monetizable daily active user), is still reporting decent growth in its mDAUs, which is a sign that people are spending more time on the platform. Twitter has been working hard to weed bad actors out of its platform, which is a positive step, as advertisers don’t want their ads showing up next to negative content.
Twitter stock is trading at 8.8x its trailing-12-month sales, which seems slightly stretched compared to its rival Facebook, which is trading at 8.6x its trailing-12-month sales despite being a much bigger company and growing much faster than Twitter.
While Twitter stock slumped on June 13, competitor Snap (SNAP) saw its stock rise over 2% on the day, marking a 14-month high.