Twitter share price outlook

There are wildly mixed views on the outlook facing shareholders in Twitter following the release of its latest quarterly results.

Views are mixed on the outlook facing shareholders in Twitter following the release of its latest quarterly results.

Twitter share price outlook

Twitter Inc (NYSE:TWTR) Q3 15A revenues / adj-EPS was $569m / $0.10 ahead of consensus at $559m / $0.05.

For analyst Richard Windsor at Radio Free Mobile the share price story remains user growth and guidance.

“The gloss of Jack Dorsey’s appointment as CEO was well and truly tarnished by yet another quarter clearly showing that Twitter has ground to a halt,” says Windsor.

Windsor notes Twitter has adopted video in a similar manner to Facebook, but it has yet to see video drive a meaningful improvement in overall user engagement.

However, it is on video where Twitter’s future is bright argues Sotirios Paroutis an Associate Professor of Strategic Management at Warwick Business School who researches Twitter.

Paroutis says:

"Three areas sum up what is happening at Twitter: Twitter Moments, videos and the small and medium sized businesses channel. Moments is a fundamental shift in Twitter’s thinking – where users follow topics live instead of accounts - and encapsulates current efforts to make Twitter easier to understand.

"With the volume of video consumption on the increase, Twitter is trying to attract the display ad budgets of advertisers.

“In Q4 there will be more related products, such as the new video narratives in the form of Promoted Moments. There are nine million small and medium sized business accounts on Twitter that represent a new marketing channel the firm has yet to fully utilise.”

Windsor has harsh words for new CEO Dorsey:

“A bold new direction requires a dedicated, focused and highly engaged leader which Twitter simply does not have.

“Instead Jack Dorsey has to spend a good portion of his time running Square and bringing this company to IPO.

“Hence, I see no bold moves and suspect that the current strategy will deliver marginal improvements at best.”

Paroutis agrees that for the Twitter share price to increase in value Dorsey needs to show more focus on the small and the big.

“ On both fronts, he has promised an increase in the pace of his firm’s execution going forward. This pace does need to increase to keep Twitter relevant and easier to understand for  more people.”

"The Q3 financial results provide the basis for some early optimism that Twitter's attempt to simplify its organisation and services is working  – but much more work needs to be done. More work is needed to keep simplifying the experience, and keep engaging developers, advertisers, and users.

Windsor says he sees further disappointments ahead and thinks that the Twitter share price will continue to fall.