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Twitter 'Hard To Buy At These Levels' Says Wunderlich

Twitter Inc (NYSE: TWTR) shares slipped in early Friday trading despite a positive earnings preview report from Wunderlich Securities, although the firm is cautious at the current valuation.

Analyst Blake T. Harper noted that Twitter will report on Monday, October 27, and he expected the company to post revenues, EBITDA and EPS above his estimates and the consensus.

Harper estimated Q3 EPS at $0.03 and Q4 EPS at $0.07. Full year revenue and EPS was estimated at $1.343 billion and $0.13, respectively.

"We believe advertisers have continued to increase their spending on social platforms, including Twitter, and estimated advertising revenues should increase over the next several quarters," according to Harper.

The report noted that the "business and financial model are gaining momentum, but [we] are more cautious on the shares, which are trading at 14.5x EV/S and 64x EV/EBITDA on our FY 15 estimate growing 61 percent Y/Y and 101 percent Y/Y, respectively."

Despite adding users, launching a music partnership and new e-commerce initiative for the mobile app, the report concludes that while "expecting more strong results...[the] stock is hard to buy at these levels." Harper "would be more inclined to recommend the shares at lower valuation levels or if new market opportunities accelerate."

The firm maintained a Hold rating and $45 price target.

Twitter Inc recently traded at $49.56, down 0.22 percent.

Latest Ratings for TWTR

Oct 2014

Citigroup

Initiates Coverage on

Neutral

Oct 2014

Susquehanna

Maintains

Neutral

Oct 2014

Nomura

Maintains

Buy

View More Analyst Ratings for TWTR
View the Latest Analyst Ratings

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© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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