Twitter Inc. (TWTR) Showing Weaknesses or Patiently Awaiting Momentum

Scott Kessler, S&P Capital IQ lead tech analyst, drew attention to Twitter Inc. (NYSE:TWTR) execution during an interview on CNBC. In general the company is selling high, slightly lower than $50, after the slump period in May, when it was sold at about $30 per share. The price has been rebounding slowly up to this point, where there is little certainty in which direction it will head on from here, making prospects for Twitter Inc. (NYSE:TWTR) quite dim for analysis.

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“In terms of Twitter, clearly, the thoughts about the stock and the company have improved, we think the addition of Anthony Noto as the CFO is going to help, but what it comes down to is they’re increasing their capabilities around monetization, we’ve seen indications of that and we’re wondering what’s going to happen next. But the valuation still seems pretty full to us and we have a ‘Hold’ opinion on that stock,” Scott Kessler said.

The current state of affairs for Twitter Inc. (NYSE:TWTR) promises a highly unpredictable future, although the company has been showing good progress and intends of reshaping its strategy in a favorable manner. Twitter Inc. (NYSE:TWTR) has a Forward Price to Sales Ratio 22 for the this year, while for next year the same metric stands at 13. In general, its performance resembles Facebook Inc. (NASDAQ:FB), yet due to the volatile nature of the business it is unknown how the swings in the stock price will be compared to the social network’s performance.

S&P Capital announced its ‘Hold’ rating for the Twitter Inc. (NYSE:TWTR) stock even from its high $30’s meaning probably that the company exceeded expectations and has potential impressing anew, but it might also be a glimpse of confidence spread among the investors and customers, which cause the price to rise. Taking into consideration the fact that the media sector is volatile by nature and valuations are pretty stretched for the companies involved, we can safely infer that patience might keep distant unpleasant surprises.

Disclosure: none

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