Shares of social network Twitter (NYSE:TWTR) 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.
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.
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.