Currently, Twitter (TWTR) shares are trading at $36 per share. Some analysts think that the stock is going to lose pressure in the coming months. The analysts at MoffettNathanson cut their target price on Twitter stock to $25 from $28. There were a number of reasons for analysts’ bearish stance on Twitter, according to a note to investors cited by Bloomberg. Besides cutting Twitter’s target price to the lowest level on Wall Street, MoffettNathanson also reaffirmed its “sell” rating on the stock.
According to MoffettNathanson, Twitter has an extreme valuation. The company is about to run out of growth momentum in its revenues. While Twitter’s revenues are set to slow down, the company’s costs will likely keep rising. The situation could put the company’s bottom line at risk.
Twitter’s “buy” recommendations
Only some of the analysts think that Twitter is in trouble or heading south. Twitter has received 12 “buy” recommendations, 24 “hold” recommendations, and six “sell” recommendations.
Twitter is scheduled to report its second-quarter results on July 26. The company expects to report second-quarter revenues of $770 million–$830 million. For the first quarter, Twitter reported revenues of $787 million, which increased 18% YoY (year-over-year). The revenues rose 39% YoY at Snap (SNAP), 26% YoY at Facebook (FB), and 17% YoY at Google’s Alphabet (GOOGL) in the first quarter. Yelp (YELP) recorded 6.0% YoY revenue growth in the first quarter.