Analyst: Twitter Cult Valuation Is Hard to Justify
Twitter (NYSE:TWTR) closed on Christmas eve at $69.85 per share, up 8.13 percent over the course of the half day and up 71.55 percent since the beginning of December. The social media company, which will close its fiscal year on December 31, closed the day with a market cap of $38.05 billion.
If you ask Wunderlich Securities analyst Blake Harper, he would probably tell you that this valuation is difficult, if not downright impossible, to justify with the kind of level-headed reasoning expected of investors. Harper recently reiterated a Sell rating on Twitter stock, and in a note seen by StreetInsider, he argued that although there is momentum behind Twitter, the market appears to simply be ignoring traditional valuation metrics, and finding any excuse to be bullishly.
“While the company is growing revenues faster than its fastest growing peers and we do recognize the potential for the company to capture larger portions of the mobile and TV advertising market, it appears valuation metrics are irrelevant and that investors are betting aggressively on Twitter being the next great media-technology platform,” Harper wrote.