Analyst Note
| Ali Mogharabi |Twitter reported strong first-quarter results, although as expected, ad revenue growth was not as impressive as its peers in the social media segment. As we had anticipated, the firm is now seeing a return of brand advertising on its platform due to the economic recovery, with continuing improvement in direct response as well. Solid demand combined with strong growth in users drove total revenue above the FactSet consensus estimate. While the firm provided user growth guidance for the remainder of 2021 below market expectations, we think this weakness will be offset by continuing improvement in user monetization. We have not made significant changes to our model and continue to value Twitter at $52 per share. The stock is down more than 11% in after-hours trading but remains overvalued in our view.