The Wall Street brokerage on weekday set a worth target of $26 a share, compared to the initial public offering's $17 to $20 indicative vary. Last month, polar analysis had set its worth target for the social media micro-messaging company at $29 a share, SunTrust at $50 and capital of Kansas Capital at $54.
Twitter, that is wrapping up its 1st week of conferences with prospective investors across the us, can arrive on the big apple exchange with a fraction of the users and revenue - and ballyhoo - that accompanied Facebook Inc's much-heralded debut last year.
Twitter same in Gregorian calendar month it doubled its revenue within the third quarter to $168 million, however its losses widened as prices grew. it's ne'er created a profit.
Morningstar analyst Rick Summer same Twitter's user growth can type a "critical mass" that will capture new advertising budgets. Twitter, that has partnered with broadcasters to position itself as a "second screen" to ancient TV, may receive a slice of advertising deals that antecedently would have gone to TV completely.
"For example, the corporate recently in agreement to a billboard manage the National league to distribute proprietary content (short replays) to Twitter users," Summer same in an exceedingly analysis note.
Some analysts say Twitter may grow higher than the valuation of roughly $11 billion inferred by the company's initial public offering plans. Others worry, however, that Twitter has to this point offered scant proof it will generate enough revenue with its staple "promoted tweets" ad product, particularly while not considerably growing its variety of users - ne'er a guarantee within the fickle world of social media.
Investors United Nations agency met with Twitter executives throughout this week's roadshow say they're optimistic concerning the deal, partly as a result of they see very little sign of a number of the exuberance that preceded Facebook's initial public offering and partly owing to what they argue area unit affordable valuations.
At AN initial public offering worth vary of $17 to $20, Twitter would be valuing itself at seventeen to twenty times trailing 12-month sales, per Reuters' calculations supported initial public offering filings, excluding shares issued within the future. Facebook trades at concerning seventeen times trailing 12-month sales and LinkedIn house at roughly nineteen times.
Final valuation is anticipated on Nov vi.
LIMITATION
Jeff Sica, founding father of Sica Wealth Management, whose purchasers own shares in Twitter, same that at AN capitalist lunch, "All they may extremely remark could be a one dimensional thanks to build money" in breaking news and media. "That's once you begin to visualize the limitation for revenue generation going forward."
Also, Facebook on Wed same it'd cap however usually ads area unit shown to users, leading analysts to believe the corporate could have discovered a limit to what number social media ads is exposed to users before they get irritated. within the terribly long haul, that might hold implications for Twitter, given their similarity in advertising models.
But optimistic analysts note explosive revenue gains by each firms.
Brian Wieser, AN analyst at polar analysis, saw positive signs in Twitter's third quarter, spoken language that the 123 % revenue growth exceeded his expectations whereas user growth appeared sturdy.
The bull case for Twitter was 1st created weeks agone by Robert Peck, AN analyst at SunTrust Robinson Humphrey United Nations agency maltreated a $50 worth target on Twitter before the corporate priced its shares.
"Many investors can investigate Twitter vs. Facebook, as AN acceptable comparison. whereas we expect there area unit several similarities between the 2 firms, we expect Twitter could be a distinctive company, with aspects of Google, Facebook, LinkedIn and Yahoo in its polymer," Peck same.
Topeka Capital equally saw price in Twitter's distinctive network. "Twitter has become substitutable with social TV," analyst Victor Anthony wrote. "If Twitter captures simply one % of those international TV ad budgets, that might mean over $2 billion in revenues for Twitter annually."
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