12 Twitter Analysts Review Earnings (And Can't Agree On The Stock)

Shares of Twitter Inc TWTR are plunging more than 8.5 percent on Wednesday after the company reported above-consensus revenue and EPS numbers for Q3. Why the big sell-off and where will Twitter’s stock go from here? Here’s what Wall Street is saying.

Baird-Neutral
Analyst Colin Sebastian calls Twitter a “work in progress” and points out the company’s soft user growth rate (+8.0 percent year-over-year). He maintains a Neutral rating and indicates that market penetration remains an uncertainty.

Barclays-Equal Weight
Analyst Paul Vogel calls the quarter “modestly better” than previous quarters but was disappointed by Q4 guidance. The firm maintains its Equal Weight rating.

Macquarie-Neutral
Analyst Ben Schachter is now “incrementally more concerned about TWTR’S near/mid-term growth profile, while the long-term opportunity remains potentially compelling.” The firm maintains its Neutral rating.

Morgan Stanley-Underweight
Analyst Brian Nowak says that the weak Q4 guidance “reinforces our concern that Twitter will be unable to gain enough incremental share of ad budgets to deliver consensus expectations and support current valuation.” The firm maintains its Underweight rating.

Nomura-Neutral
Analyst Anthony DiClemente believes that “as long as Twitter user growth remains stalled, it will be difficult for revenue to reaccelerate, muting the 3-5 year growth outlook.” The firm maintains its Neutral rating.

Raymond James-Market Perform
Analyst Aaron Kessler was “encouraged by efforts to improve Twitter for users and provide better measurement tools for advertisers,” but believes “the turnaround remains a multi-quarter effort” and sees risk and reward balanced at this point. The firm maintains its Market Perform rating.

Stifel-Buy
Analyst Scott Devitt now sees “a positive risk-reward with potential optionality from additional product initiatives, an ambitious marketing campaign, and the potential for an increased share of ad budgets after Twitter integrates with DoubleClick for third-party measurement and attribution.” The firm upgraded Twitter from Hold to Buy.

Wells Fargo-Market Perform
Analyst Peter Stabler says that Twitters active user growth is “stuck in neutral” and sees “a rich valuation, complexity of the Twitter platform and potential challenges to meeting high investor expectations.” The firm maintains its Market Perform rating.

Goldman Sachs-Buy
Analyst Heath Terry argues that “despite the slowdown in MAU growth and 4Q outlook below expectations, we continue to believe the accelerated pace of product innovation, including the recent launch of Moments, should improve ease of use and expand the audience.” The firm maintains its Buy rating.

Jefferies-Buy
Analyst Brian Pitz remains “LT positive on the potential of product changes” and will “continue to look to see meaningful benefits to user and engagement levels.” The firm maintains its Buy rating.

Oppenheimer-Perform
Analyst Jason Helfstein predicts that “shares are likely to remain stagnant until new product features, such as ‘Moments,’ or the company’s upcoming advertising campaigns, can produce evidence of higher user engagement. The firm maintains its Perform rating.

Pacific Crest-Overweight
Analyst Evan Wilson explains that “our analysis of companies with new CEOs [shows] that 90 days after hiring shows a significant positive return.” He notes that the firm is 17 days into its “new CEO” trade and maintains its Overweight rating.

Disclosure: the author has no position in the stocks mentioned.