Twitter Stock Analysis:
A lot has been going on with Twitter recently, both good and bad. The headlines have now been preaching a buyout is in the works. Despite the controversy surrounding the company, I will, in this Twitter stock analysis show you why success is inevitable for Twitter in the long term and how I think it will reach new all-time highs. In fact, you might want to check out my post on why Twitter will not get bought out by clicking here. In this article, I will also quickly explain why an independent Twitter long term is a good thing. So let’s get started by going over the recent positive developments on Twitter.
Great things in the making for the blue birdie
So, tides have been shifting for the bird, mostly for the better. Since Twitter’s Initial Public Offering, the company’s share price has seen a long and painful drop into the low teens. This downward spiral made Twitter Wall Street’s punching bag. Despite the hate, Twitter has been improving their business, at least, in my opinion. Furthermore, its share price has actually started recovering in the past couple months. Without further ado, let’s start this Twitter stock analysis.
Live Streaming, huge deals
As some of you may know, Twitter has been expanding its live content. They have been slowly pushing forward and bettering Periscope. More importantly, they have started a string of live stream deals with media giants such as The NFL, MLB, PGA, Bloomberg, Cheddar and much more. As you can imagine, this fits in perfectly with their platform. I have trouble seeing how these changes could not bring in huge ad revenue and at least slightly boost their monthly average users (MAU’s). Although there have been reports of low viewership, this is likely just due to it being new, not promoted enough, and people not yet knowing about the feature. I will now transition into their advertising improvements.
Advertising on the rise
While Wall Street has been banging the table for more MAU’s this isn’t really a concern as I will explain later in this post. Twitter has made a massive change to their advertising model. Not really a change to their base model, but more of an addition. They have kept their previous ad types but have increased the amount on the site. Furthermore, they have are now giving users the opportunity to monetize the content they post on the website, same for Periscope. This is a significant change and can be compared to the ad model used by Google’s YouTube that has worked so well. This addition should also boost content creators presence and activity on the platforms and skyrocket ad revenue. So much value at a little share price!
Valuation is way too low
This is key in this Twitter stock analysis! This is the reason why I think Twitter will reach new all-time highs and see $100+ share price in the next couple years max! Why so much enthusiasm? Simple. Twitter is very undervalued compared to other names in the space. Its market cap comes out to around $15 billion as of now. This is shocking compared to FaceBook that has theirs at 370 billion dollars. I won’t make a list, but if you look around, you will see the discrepancy in Twitter’s valuation. Sure, FaceBook is doing great, but their main business is saturated.
Based on what I mentioned in the previous paragraph, I think Twitter should be valued at no less than 60 billion dollars based on potential and the almost guaranteed increase in users, which I will explain in the next section. This increase would already provide a huge return, but as you can see, still not valued very highly compared to FaceBook.
Twitter is a crucial platform now
It is the wave of the future. The need for instant media, messaging and news is vital in today’s age. It is a known platform and has all of what is mentioned above. The service is a staple in today’s society, and as the world gets bigger so will Twitter long term- it’s inevitable at this point. Twitter serves various demands of the now and of the future. Based on this, there is really no way that this company has anywhere to go except forward, straight to success. Hopefully, this Twitter stock analysis was helpful, but remember these are just my opinions and not investment advice.
The fact of the matter is that the Internet will only grow from here. This means that a bunch of people will continuously join established services like Twitter. Obviously, this bodes well for online advertising, which Twitter is part of.
By now, you should be seeing the bigger picture. Twitter fulfils one most basic but vital needs for humans, communication. Becuase of this, it’s hard to think that the company will fail. But, at the end of the day, only time will tell.