Why Twitter, Inc. Shares Could Fly 40%

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Twitter, Inc.  (NYSE: TWTR  ) surged 3% today after Nomura Securities upgraded the microblogging giant from neutral to buy.

So what: Along with the upgrade, analyst Anthony DiClemente planted a price target of $43 on the stock, representing about 40% worth of upside to yesterday's close. So while momentum traders might be turned off by Twitter's sharp year-to-date pullback, DiClemente's call could reflect a sense on Wall Street that its growth prospects are becoming too cheap to pass up.

Now what: Nomura raised its top-line estimates for Twitter on improved monetization and its adjusted EBITDA view on higher incremental margins. "We believe that the market has now priced in the expectation that Twitter remains a niche social media product," said DiClemente. "We believe risk / reward is much more favorable now, given the possibility that product enhancements rejuvenate user growth; we think ARPU will beat estimates given strength in ad demand, and we believe that incremental margins should be higher than the Street expects." More importantly, with Twitter boasting a rock-solid balance sheet and still-beaten down stock price, the downside seems limited enough to bet on it.

Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.


Read/Post Comments (2) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 28, 2014, at 6:47 PM, terrapin wrote:

    TWTR is a seriously used niche product with increasing popularity. It's Facebook style logic to invest in it, but with a smaller user base. When will it be Pandora's turn to move up as well? Folks at the Recode conference in CA going on in late May thinks Pandora is great because it has such detailed data on you and I. It's a metadata Brave New World play.

    from the crochety terrapin

  • Report this Comment On May 29, 2014, at 2:00 AM, danishboy wrote:

    TWTR was up 10+%, 3 points. Not 3%.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2973850, ~/Articles/ArticleHandler.aspx, 9/16/2014 3:30:44 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement