Twitter's Growth In Q1 Should Lead To 305 Million MAUs, Says Bob Peck

Against the backdrop of muted expectations, Twitter Inc TWTR is scheduled to report its 1Q earnings on April 26. SunTrust Robinson Humphrey’s Robert S. Peck maintained a Buy rating for the company, with a price target of $20.

Analyst Robert Peck believes Twitter would report in-line financials and issue conservative guidance. He added, however, that most investors are likely to focus on MAUs as “the barometer for success of the company’s strategy and vision.”

Better MAUs

Peck commented that Twitter’s 1Q MAUs may be “stable to better.” He expects MAU net adds of +4M, up significantly from a decline of 2M reported for 4Q. The estimated MAU net adds would take the company’s core MAUs to ~305M at the end of 1Q.

“Recall that historically 1Q is seasonally stronger for MAUs and management noted on the 4Q conference call that 1Q had returned to 3Q’15 levels of activity, or ~307M,” the analyst wrote.

Although activity on the platform continued to be challenged, trends seemed to be stabilizing, Peck commented, adding that he was “cautiously optimistic” about this. He added, however, that there were risks from the continued growth of Instagram, owned by Facebook Inc FB [Rated: Buy], and Snapchat, especially considering “time spent per user and interest levels from brand advertisers.”