Analysts at two firms have cast doubt on Twitter’s future potential, having downgraded the stock of the faltering social media company, now worth about $12.4 billion, to the equivalent of hold and buy.
“What is Twitter? Quite frankly, we don’t believe that question has been answered,” James Cakmak, a Monness, Crespi, Hardt & Co. analyst, despaired in a fresh note cited by Bloomberg. He added that, without changes ahead, Twitter “will continue as a niche product.”
In another note, Robert Peck, a SunTrust Robinson Humphrey analyst, expressed belief that, due to challenged user growth and engagement, “increasing monetization can only go so far with limited new product introductions increasing competition (Snapchat!) and a challenging advertising background”.
Twitter’s major push into live video with Periscope could provide some relief, though the social networking site does face tough competition from its arch rival, Facebook, in this area.
