And one thing is certain, the higher the stock goes, the higher the expectation will be for earnings.
At its current levels, the stock is priced for perfection and must dramatically outperform expectations and its expectation is already at 100 percent growth, Squali said.
He added that for his firm to even change its rating, Twitter’s stock would need to show more than 103 percent growth. In addition to earnings pressure, Twitter may also have to prove that it can sustain its high valuation under economic pressures.
“All it takes is to go through a hiccup in macro and people are going to want to hide somewhere with an earnings story. Well, this one doesn’t have an earnings story,” Squali said.
Read also:
Mega Twitter Bull Downgrades The Stock To Hold After A Monster Run (Business Insider)
#Downgraded: Twitter Analysts Turn Cautious After Big Rally (Wall Street Journal (blog))
Why Twitter Investors Need To Follow Retweets (Forbes)
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