Make no mistake, there was some angst at the beginning of 2021 after Twitter banned former President Donald Trump. How it would impact user engagement? Well, the company’s management team sought to dispel those fears during its earnings call last week.
Twitter announced that its increase in average monetizable daily active users for the month of January exceeded the company’s historical average for the past four years, re-igniting optimism among some analysts about the company’s ability to maintain user momentum without the buzz of Trump tweets.
The company’s latest numbers also gave rise to a former skeptic to soften his stance on the stock. Moffett-Nathanson’s Michael Nathanson upgraded the stock to neutral from sell last Wednesday, asserting that while the stock’s valuation still looks a bit extended, investors don’t seem concerned about valuation in the current market, meaning that a continuation of Twitter’s most recent revenue-growth performance could continue to move shares.
Nathanson is also more upbeat about ongoing revenue initiatives at Twitter, including through its revamped mobile-app promotion (MAP) tool. “Truth be told, we think Twitter has the potential to drive new users and improve monetization if they can finally unlock the promise of performance-based marketing,” he wrote.