Analyst Ken Sena also slashed his price target on the stock from $18 to $17, suggesting a 16% downside to TWTR’s Wednesday closing price of $20.21.
Sena made the move noting he sees “more risk than reward” ahead of social media rival Snapchat’s anticipated monetization ramp this fall. Since Twitter and Snapchat compete largely for the same ad dollars, TWTR could be on the losing end of the much-hotter Snapchat’s push.
The analyst said in his research note to investors that services like Snapchat are also attracting users away from Twitter’s platform. Meanwhile, Twitter is also falling behind in the areas of machine learning and artificial intelligence, which Facebook and others are investing heavily in.
That double whammy of possibly losing advertisers and users creates a very risky environment for the stock, Evercore concluded.
Twitter shares were off around 5% in earlier trading this morning, but pared some of those losses to $19.47, down $0.70 (-3.50%). TWTR has fallen more than 15% since the start of 2016.