MoffettNathanson analyst Michael Nathanson on Tuesday downgraded his rating on Twitter's stock to "sell" from "neutral" and cut his price target by $3 to $12, arguing in the title of the report that "Hope Is Not a Strategy."
He cited "advertiser fatigue" as one key driver of his downgrade of the social media stock. "Twitter is now not only dealing with user fatigue, but advertiser fatigue as well," Nathanson wrote. "Following triple-digit growth only two and a half years ago, Twitter is now growing in line with Google on a revenue base that is about 1/35th the size, indicating both a lack of perceived value and increasing client choices."
He also argued that the company was facing a "harder road ahead" amid increasing competition from Instagram, Snapchat, Pinterest, Facebook, and YouTube. "Facebook continues to co-opt the features most unique to Twitter through the additions of Trending Topics, Instant Articles and live video," the analyst said.