Twitter CEO Dick Costolo woke up this morning to the most brutal set of Wall Street and City of London analyst notes we’ve ever seen for the company.
The company’s Q1 2015 earnings statement leaked early last night, and revealed the company missed expectations on revenue and was planning to deliver lower guidance for user growth.
In short, it was a nightmare.
We gathered a bunch of analyst notes this morning. Here are the worst bits. There is one piece of good news in all this — Twitter’s performance was so all-round terrible, pushing the stock down so low, that most banks now rate TWTR a “buy.”
Each analyst’s price target is in parentheses:
Macquarie: “Ungood” ($US46)
The Bottom Line — Ungood. TWTR’s 1Q miss and weak guidance will obviously shake investor confidence in management’s ability to execute. With operational challenges, competitive threats, limited visibility, and a mixed track record, we think that TWTR will need to prove its ability to execute before investors will return to the story. And despite a good or bad quarter, our long-term concerns around its longevity, potential scale, and valuation remain.
Barclays: “Hard to Stomach the Volatility Without a Clearer Path.” ($US44)
We are struggling to find any silver linings in the results as MAU growth met expectations while total revenue, advertising revenue and EBITDA all missed forecasts and were guided below Street expectations for Q2. The company not only missed our numbers, but the distribution between advertising and licensing was skewed in the wrong direction to us.
DB: “Euphoria back to despair” ($US60)
The commentary around advertiser ROI likely leads to renewed questions from investors around the viability of Twitter as a “must-buy” advertising channel once again (although we disagree).
Pivotal Research group: “Weak” ($US50)
Twitter reported 1Q15 earnings substantially below guidance, consensus expectations and our own forecasts, which were too optimistic.
Bank of America Merrill Lynch: “a disappointing financial quarter highlighted by decelerating ad revenue growth” ($US52)
Goldman Sachs: “slower than expected” ($US56)