Pivotal Analyst Explains Twitter Downgrade, Says 'It's Not For Everybody'

Twitter Inc (NYSE: TWTR) shares were trading in the red Wednesday following Pivotal Research Group's Brian Wieser's downgrade of the stock from Buy to Hold, while keeping the price target unchanged at $51. In his note, Wieser argued that service offered by Twitter is "niche."

Wieser was on CNBC to discuss the reasons behind the downgrade.

Volatility Is All Over The Place

"The stock hit my price target. We upgraded back in December," Wieser said. "I think it might have been the day of the bottom of the second-half of the year, where it was clearly too cheap. It was clearly being beaten up, and now the reverse has happened.

Related Link: Twitter Investors: Pivotal Research Just Downgraded The Stock

"This is a valuation call, but at the end of the day valuations are the right way to look at it, when you look at a name like this where the volatility is all over the place."

Not For Everybody

Wieser was asked if he really doesn't love Twitter at all, as evidenced in his note, where he wrote that Twitter was "a core product that only has niche market appeal at maturity."

He replied, "I actually think very positively about the company. I think very positively, much more positively than I think most of the analyst community about the company's capacity to actually execute and iterate and evolve what their offering is to advertisers.

"I don't think that's been appreciated, certainly not when the stock was on its way down. I do disagree with the company's belief that this is a ubiquitous product. I don't believe it's for everybody. That much is certain, " Wieser concluded.