20140710-高盛-Continued_accelerated_pace_of_innovation_for_users___advertisers_14页_898kb

Summary of Document Content

Core Content

The document provides an analysis of Twitter's continued accelerated pace of product innovation and its implications for user growth, engagement, and monetization. It outlines the company's strategy and performance metrics, including financial projections and valuation models, while also highlighting key risks and investment considerations.

Main Points

What's Changed

• Since 4Q13, Twitter has seen a significant increase in product innovation, with more than 3x the number of enhancements compared to previous quarters.
• The company has made changes in product and engineering leadership, which are expected to enhance ease of use and user engagement.
• The value of Twitter's platform is believed to be better reflected in advertiser adoption than in its share price.

Implications

• Engagement: The reported MAUs are considered an understatement of the platform's actual reach, as comScore reported 116mn unique visitors, which is double the 57mn MAUs.
• Monetization: Enhancements such as Promoted App ads, improved analytics, and global ad capabilities have driven incremental advertiser adoption.
• Innovation: The addition of Daniel Graf and Alex Roetter is expected to further Twitter's goals of improving user experience and product development.

Valuation

• A 12-month price target of $52 is set based on a 70X EV/EBITDA multiple or a 17X EV/sales multiple, justified by Twitter's faster growth.
• The valuation is based on Goldman Sachs estimates and compares Twitter's metrics to industry peers.

Key Risks

• Failure to drive user growth, engagement, and monetization.
• Intense competition in the social media space.

Investment Profile

• Investment List Membership: Americas Buy List.
• Key Data:
  • Current Price: $37.84
  • 12-Month Price Target: $52.00
  • Market Cap: $26,839.2 mn
  • Dividend Yield: 0.0%
  • Net Margin: -52.4%
  • Debt/Total Capital: 6.1%

Financial Projections

Growth & Margins

Key Financial Enhancements

• Promoted App Ads: Launched in 2Q, with positive ROI from early advertisers such as Spotify, FreePrints, and GetTaxi.
• Improved Analytics: Introduced a robust analytics dashboard for Twitter Cards, allowing advertisers to measure engagement and audience demographics.
• Global Ad Capabilities: Expanded ad features such as TV conversation targeting, geo-targeting, and language targeting to international markets.

Investment Rationale

• The company's focus on product innovation is expected to enhance user engagement and drive monetization.
• The document remains a Buy rating, citing the potential for further multiple expansion due to faster growth compared to the industry median.

Price Performance

Additional Financials

Conclusion

Twitter's continued innovation, especially in media and ad capabilities, is expected to drive growth and improve monetization. The company's valuation reflects its potential for multiple expansion due to its faster growth rate. The document maintains a Buy rating, acknowledging the platform's value in advertiser adoption and its strategic moves to enhance user experience and global reach.