Anyone hoping that Chief Executive Jack Dorsey's plans to boost growth would have had a big impact on third-quarter results would have been disappointed.
Twitter reported both anemic user growth for the three months to Sept. 30 and offered up a tepid revenue forecast for the current quarter on Tuesday.
Twitter's shares, already down 13 percent this year, were down 11 percent in early trading on Wednesday.
Some investors clearly expected more from Dorsey, the company's co-founder who took the CEO role earlier this month after serving on an interim basis for nearly four months.
"While we believe many of the growth initiatives highlighted by 'new' CEO Jack Dorsey are promising, it remains less clear whether these will translate into more active user growth and engagement," Baird Equity Research analysts wrote.
Twitter's fourth-quarter revenue forecast of $695 million- $710 million was well below the average analyst estimate of $739.7 million.
In a few short months under Dorsey, Twitter introduced the 'Moments' feature, added polls to tweets, laid off about 8 percent of its workforce and rolled out a "buy" button.
Twitter executives spent a lot of time touting Moments on a post-earnings call. However, analysts remain mixed on the potential of the feature, which organizes what Twitter employees consider to be the day's best tweets about key events.
PRICE TARGETS CUT
"We have been singularly unimpressed with Moments, and view the service as no different or more interesting than a typical home page on any competing news site," Wedbush analysts said.
User growth will depend on the execution of those projects and Dorsey's ability to find time to lead those efforts, analysts said.
Apart from Twitter, Dorsey is also running mobile payments company Square Inc, which is prepping for an initial public offering, and might require more of his time.
"We don't believe a non-fulltime CEO is an ideal solution for Twitter today," RBC Capital Markets analysts said in a note.
Of 44 brokerages covering Twitter, at least 17 cut their price targets, altHough none lowered their ratings.
And there are still 18 "buy" or higher ratings on the stock, along with 24 "holds" and only two "sell" ratings, according to Thomson Reuters data. The median price target is $34. Twitter's shares were trading at $27.88 just after the opening.
Some analysts also believe that Twitter's fourth-quarter guidance was conservative, and noted potential for the company to execute better in 2016 as its nascent products take hold.
And Dorsey may yet come through, some think.
"Twitter faces declining expectations and easing comps as it approaches 2016, which should be a perfect backdrop for a product-focused founder to look like a savior," Stifel, which raised its rating on the stock, said in a note.
(Reporting by Anya George Tharakan in Bengaluru; Writing by Supantha Mukherjee; Editing by Ted Kerr)