Twitter will still need time to recapture the ad budgets even after the recent gains on its platform as noted by JPMorgan analyst Doug Anmuth on Friday morning.
Job well done
The social media giant has done a good job in transforming its site in the recent months. However, a concern remains as to the ability of the company to drive the ad dollars.
Anmuth expects that the revenue by Twitter to decline during the second and the third quarters of the current year 2017. He cautions the investors that the 2% growth outlook in the fourth quarter might be a little bit too optimistic.
Anmuth noted “We believe downloads have remained steady and Twitter is higher in the app rankings for several markets relative to a year ago.” This is in regard to the second quarter user data. He added that ComScore time spent reduced in the months of April of May together with unique mobile visitors.
They had an estimate of four million monthly active users in the second quarter. He maintains that the Neutral rating on the company’s stock target is at $15.
The shares of Twitter closed at $18.02 per unit on Friday after a rise by 0.56% or $0.10.
From August 2014, Twitter had recorded about 661 million tweets per day which have since halved. Twitter denied the reports and has since engaged in a couple of activities to ensure its site is user friendly, thereby attracting more followers.
Action by Twitter
Twitter has added features on its platform to enhance its services which include enabling the users to report abusive tweets as well behavior on its platform. The manager of Action Alerts PLUS charitable trust portfolio, Jim Cramer stated, “I think that’s kind of interesting as abusive behavior is a major turnoff for many Twitter users.” Abusive behavior has been a top complaint regarding the platform for a long time.
Cramer adds that if Twitter is able to get rid of abusive behavior as well as trolling, off its platform, it will end up improving the users’ experiences on the site and eventually make it more valuable. There may be no way to prove it but Twitter’s management maybe further ahead that the investors think.