Twitter is 'the Yahoo of social media': Analyst

As Twitter plunges after its earnings report, one analyst is cutting his price target on the stock as he draws a grim parallel between the social media outfit and a notoriously tattered tech company.

Twitter is "the Yahoo of social media," Wedbush analyst Michael Pachter proclaimed in a Wednesday note, days after Verizon announced an acquisition of Yahoo's operating business for a fraction of what the internet pioneer was worth at its peak.

Twitter, like Yahoo, has allowed itself to stagnate, said Pachter.

"Management appears complacent about the status quo and unfocused on the lack of user growth," the analyst wrote. "Until Twitter is focused on attracting new users, driving increased use by its existing users, and demonstrating its value proposition to people who don't use the service, we expect it to grow very slowly."

Even worse, "its service is too complicated and difficult to use for the average Internet user despite multiple changes."

After a beat on earnings, a miss on revenue, weak guidance and flattish monthly active users, Pachter reduced his price target on the stock to $14 from $20. On Wednesday, Twitter fell below $16 per share.

He wasn't the only analyst cutting expectations. Cantor Fitzgerald analyst Youssef Squali reduced his rating on the stock to hold from buy, and his price target to $18 from $23, based on his anticipation that it "reigniting growth is likely to take longer," as the company loses share to Facebook and to Alphabet's Google.


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Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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