Twitter Inc. (NYSE: TWTR) has completed its initial public offering, and now it has a sky-high valuation of more than 50-times sales. The stock options began trading on Friday and the stock became legal to short sell this last Wednesday.
24/7 Wall St. wanted to give an analyst montage now based upon the research reports it has seen. These are reports that are not from the underwriting syndicate as those reports are not coming until December.
Cantor Fitzgerald started coverage with a BUY rating ahead of the IPO, but the problem is that it assigned only a $32 price target.
Evercore Partners issued an OVERWEIGHT rating to Twitter before it opened, and its price target was $43 for the stock.
Morningstar assigned a SELL rating as well but gave a $26 fair value target, which matches the IPO price valuations.
Pivotal Research issued a downgrade alert on the day of the IPO, saying it should fall down to a $30.00 price target.
RBC Capital Markets also started coverage with an OUTPERFORM rating in the last week but its price target was down at $33.
R.W. Baird initiated coverage at a NEUTRAL rating.
S&P Equity Research issued a SELL rating, along with a $30 price target. Despite making positive business comments, S&P’s $30 target is still 500-times its expected 2015 earnings per share.
Susquehanna assigned a NEUTRAL rating.
Sterne Agee gave Twitter a NEUTRAL rating but it assigned downside price target valuations. The firm said, “Our valuation work suggests in the base case Twitter shares should be worth at least $25 to $32 in the next 12 to 24 months. In the upside case, shares should be worth $33 to $48 while in the downside case, shares should be worth $13 to $15 during the same period.”
Wedbush Morgan initiated coverage with a NEUTRAL rating.
As you can see, the opinions here are a bit all over the place but skewed to much lower valuations. We think its executives would agree that the business of Twitter has huge upside and it hasn’t even touched its potential, but we think that they would say that the stock price is valued in the stratosphere around $24 billion. Just keep one thing in mind: using valuation analysis in hot social media stocks has been a very painful job for many analysts. So what if some of these feel like 1999 or 2000 all over again.
After pricing at $26, Twitter’s post-IPO trading range has been $39.40 to $50.09.
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