Pushing Mute? For Twitter, Cantor Fitzgerald Sees Muffled Q2 Results

With Twitter Inc (NYSE: TWTR) set to report second-quarter earnings Thursday, Cantor Fitzgerald maintains a Neutral rating on the company in expectation of “muted” 2Q17 results that will reflect continued revenue declines from product re-alignment and fierce competition.

“Although Twitter has seen daily active user acceleration in each of the past four quarters, and MAUs had a surprise bump in 1Q17, it remains to be seen whether management can maintain this sequential user growth, improve engagement on the platform, and convince marketers that Twitter remains a relevant and effect part of their ad budget,” wrote Cantor analyst Kip Paulson.

According to a report from Mediakix, average time per day spent on Twitter was just one minute. Compare that figure to Facebook Inc (NASDAQ: FB), where the average time spent per day was 35 minutes. Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) Youtube takes the cake at 40 minutes per day.

Cantor Fitzgerald is predicting a 10.9 percent decrease in revenue year over year in the second quarter, despite an expected 3M sequential increase in Monthly Active Users. Ad revenue is expected to decrease 14.2 percent year over year in the quarter.

“Given management’s commentary about revenue growth lagging audience growth meaningfully throughout 2017, and continued declines in traditional promoted Tweets, we don’t expect this negative trend to inflect anytime soon,” said Duffy.

Cantor Fitzgerald has a $16 price target on Twitter.

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