What: With Twitter (TWTR) shares continuing to set new all-time lows recently, amplified by the company's stalling user growth reported on Wednesday, shareholders were probably happy to see shares turn upward on Friday. Twitter stock rose as much as 11.1% on Friday, and is up about 11% at the time of this writing.
So what: Several analyst notes expressing bullishness toward the stock are likely behind the stock's run-up. Argus analyst Jim Kelleher lowered his price target for the stock, but his revised target of $24 still represents significant upside compared to the stock's price of about $16 today. The analyst said the stock now offers an attractive entry point. He also warned, however, that Twitter will need to follow through with steps to reinvigorate user growth.
SunTrust Robinson Humphrey analyst Rob Peck also lowered his price target while still opting to maintain a buy rating on the stock. His revised target for the stock is $20. Peck even suggested that the stock could make sense without user growth at these levels; he suggested the company could opt to reduce its headcount by 25%, and continue to boost revenue per user during the next two years.
Now what: Despite some focus on a few buy ratings for the stock on Friday, analysts seem cautious across the board about Twitter's ability to execute, going forward. Investors should keep in mind that, while analyst price targets and notes may influence stock prices in the near term, they are only opinions. It will be the business that drives a stock price over the long haul.
