RBC 'more constructive' on Twitter post results, boosts price target to $38
In a post-earnings research note titled "More DAUs Per Day Keeps The Bears Away," RBC Capital analyst Mark Mahaney raised his price target on Twitter to $38 from $34 but kept a Sector Perform rating on the shares. Twitter is up 16%, or $5.60, to $39.97 in afternoon trading after reporting Q1 results earlier today. The company's revenue and operating income "handily beat" expectations, with "robust" 20% year-over-year advertising revenue growth excluding currency, Mahaney writes in a note to investors. Further, Twitter's daily active users, or DAUs, were up a recent record 8M quarter-over-quarter, which is a "key" positive, says the analyst. Mahaney is "more constructive" on the shares, saying the company "continues to execute significantly better" and is at a "potential inflection point." In order to get even more constructive, however, the analyst wants to see an "easier valuation" or continued evidence that health improvements or new growth initiatives will help sustain or accelerate Twitter's current revenue and user growth rates.