Please ensure Javascript is enabled for purposes of website accessibility

Why Twitter, Inc. Stock Jumped Monday

By Daniel Sparks - Dec 18, 2017 at 4:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Could Twitter stock have more upside? These analysts think so. Here's what investors should know.

What happened

Shares of social network Twitter (TWTR 0.73%) jumped as much as 11.3% on Monday (and is still up over 11% as of market close). The stock's rise follows two bullish notes from analysts.

J.P. Morgan analyst Doug Anmuth raised his price target for the stock from $20 to $27, calling it one of the firm's "top small and mid-cap ideas in 2018," according to Tech Trader Daily. In a similarly bullish note, Summit Redstone analyst Jonathan Kees initiated coverage of Twitter stock with a buy rating and a $26 price target.

A businessman using a smartphone

Image source: Getty Images.

So what

Both analysts cited stabilizing finances, product enhancements, and improved engagement among the reasons for their optimistic outlook on the stock.

In Twitter's most recent quarter, its year-over-year decline in revenue narrowed compared to the previous quarter, and its loss per share also improved. Monthly active users increased 4.1% year over year.

One of the most notable positive trends for the company has been its growth in daily active users. In Q3 this metric was up 14% year over year, for the fourth quarter in a row of double-digit growth.

Now what

For its fourth quarter, Twitter management provided a guidance range for its adjusted EBITDA in which the high end would make Twitter profitable on a GAAP (generally accepted accounting principles) basis.

In 2018, investors should look for Twitter to return to revenue growth and continue to improve in user growth.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Twitter. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Twitter, Inc. Stock Quote
Twitter, Inc.
TWTR
$44.26 (0.73%) $0.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.