Twitter to drop 16%, Evercore ISI says

Dado Ruvic | Reuters

Investors should sell Twitter shares due to deteriorating user trends and rising competition from Snapchat, according to Evercore ISI, which downgraded its rating on the social media company to sell from hold.

"As broadcasting capabilities permeate competing social platforms that are winning influence with TWTR users and advertisers, which recent traffic patterns and management commentary citing its ad pricing premium confirm, we see more risk than reward, particularly ahead of Snapchat's anticipated monetization ramp this fall," analyst Ken Sena wrote in a note to clients Thursday.

"Compared to Twitter, similarly scaled social media competitors are exhibiting accelerating (Snapchat) or steady (Instagram) unique visitor growth."

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