Is Twitter stock a good investment? With Facebook stock costing about $250 and Pinterest stock up more than 100 percent in 2020, some investors may be looking at Twitter as an alternative in the social media space. Investors piled onto Twitter stock yesterday after Pivotal Research revised its view on the company’s outlook.
Twitter stock news that investors should note
Pivotal Research has upgraded its rating on Twitter stock to "buy" from "hold." It also hiked its price target to $59.75 from $36, implying an approximate 30 percent upside from its current price.
Twitter’s advertising business is set to benefit from the return of live sports and events, such as the 2021 Olympics, according to Pivotal. The COVID-19 pandemic halted live events and other sporting activities that typically generate advertising revenue for companies such as Twitter. Furthermore, Pivotal thinks Twitter Japan is strong. The business contributes about 14 percent of Twitter’s total revenue.
Twitter CEO Jack Dorsey made a huge personal donation toward fighting the pandemic. In other Twitter news, the company has begun testing a feature that lets people send voice recordings as direct messages, building on the feature that allows people to post audio tweets. Twitter is looking for new ways to bring more people to its platform and keep existing users engaged to enhance its value as an advertising platform.
What is Twitter’s stock price today?
Twitter stock had fallen 1.32 percent to $44.73 in premarket trading as of 5:59 a.m. ET today. The stock rose more than 6.0 percent yesterday to wrap up regular trading at $45.33. Twitter shares have gained more than 40 percent in 2020.
Should I buy Twitter stock?
If you're thinking about buying Twitter stock, it helps to know a little bit about it before making your move. Twitter derives almost all of its revenue from advertising. The global online advertising market is on track to hit $526 billion in 2024 from $325 billion in 2019.
As the advertising market becomes more competitive, Twitter has been exploring launching a subscription-based service that would generate recurring revenue. Twitter plans to spend $2.0 billion on repurchasing its stock to put money back into shareholders' pockets. The company launched the repurchase program as part of a settlement with Elliott Management and a deal with GoodRx stock investor Silver Lake.
The most bullish analyst covering Twitter sees a 43 percent upside within 12 months, setting its target at $65. However, the most bearish analyst sees Twitter stock crashing 58 percent from its current price to $19.