Why Now Is The Time To Buy Twitter – TWTR

Twitter (TWTR)’s recent correction, a 50 percent meltdown since its late-December peak above $70, didn’t stop SunTrust Robinson Humphrey’s Robert Peck to upgrade the stock from Neutral to Buy Monday morning, even as most metrics — Twitter trades at 133x 2015’s forecast earnings ; considerably down from a P/E ratio of 1,154 in early March — suggests the name is pretty pricey.

[via The WSJ] “We believe Twitter is one of the few Platforms of the Internet [Google (GOOGL), Amazon.com (AMZN), Facebook (FB), LinkedIn (LNKD)] that has a long runway in its core business,” Peck wrote in a research note, adding that “Platforms of this scale are unique assets that provide interesting optionality over time.” Peck also said that “one can justify buying the stock at these levels solely predicated on Twitter continuing to narrow the 50% monetization gap to Facebook, while still assuming user growth deceleration”.

The Atlanta, Ga.-based analyst, who put a $50 price target on Twitter before the IPO, maintained a $45 year-end price target on the short-messaging company and seems to have established a baseline valuation for the ticker projected on a multiple of 13x 2015 revenue estimates vs 9x currently, and 60x 2015 earnings before interest, taxes, depreciation and amortization vs 41x currently.

Twitter shares jumped following the upgrade. The stock is trading 4.30% higher at the time of this writing and down about 13.42% in the past week. From its all-time high last December, shares, currently trading at $33.62, are down a whopping 47%.

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