Twitter shares fall on report for US user growth, analyst price cuts

Jack Dorsey, co-founder and president of Twitter, co-founder and CEO of Square, speaks on stage at Bitcoin 2021, the cryptocurrency conference held at the Mana Convention Center in Wynwood on June 4, 2021 in Miami, Florida.

Joe Riddell | Getty Images

Twitter shares fell about 10% on Wednesday after the company reported disappointing growth in the number of users and analysts expressed concerns about the impact of Apple’s privacy changes on iOS.

In its third-quarter earnings Tuesday, Twitter said its total daily monetized users (mDAUs) increased 13% to 211 million, down from the 211.9 million analysts had been expecting, according to StreetAccount.

In the US, the company’s user base has grown by 1 million users, or less than 3%, compared to last year.

Based on these numbers, KeyBanc Capital Markets said that the company will not be able to meet its stated target of 315 million new millennium units by the end of 2023. The company lowered Twitter’s target price from $81 a share to $70. As of Wednesday afternoon, the stock is trading at $55.31.

“Twitter needs to materially reaccelerate US and global growth” to reach its goal, analysts at KeyBanc wrote in a note to investors. They still have a buy rating for the stock.

Revenue in the third quarter increased 37% from a year earlier to $1.28 billion. Twitter said fourth-quarter sales would be between $1.5 billion and $1.6 billion, while analysts expected revenue of $1.58 billion.

Twitter said the impact of Apple’s privacy change on iOS has been less than expected in this period, and will be modest in the fourth quarter. Snap and Facebook cited the new privacy feature, which allows users to opt out of targeted ads on apps, as the main reason for business disruptions in this period.

Some analysts remain concerned that Twitter may be harmed.

Jefferies cited “persistent uncertainty from iOS changes” as the reason for lowering the stock’s price target to $70 from $80.

Watch: Apple iOS privacy changes affect Twitter and Spotify differently

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