Some analysts, however, believe that these tweaks are more like rearranging the deck chairs on the Titanic than they are any kind of coherent growth strategy. Research firm Moffett Nathanson, which specializes in analyzing media companies and their market value, said in a new report—entitled “Hope Is Not a Strategy”—that it rates Twitter’s stock a “sell,” with a price target of $12. That’s about 15% below where the shares closed on Monday (TWTR).

Why is Moffett Nathanson so pessimistic about Twitter’s chances? Primarily because the firm believes that Twitter’s business is deteriorating rapidly—and not just in terms of the number of users or the engagement levels that many observers tend to focus on, but in terms of the advertising-based business that Twitter has tried to build on top of its service.

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“Twitter is now not only dealing with user fatigue, but advertiser fatigue as well,” the report says. A couple of years ago, Twitter’s advertising business was growing at double-digit rates, but that is no longer the case, according to analyst Michael Nathanson. Twitter is now growing at about the same rate as Google, which has revenues that are more than 35 times as large. In talking to ad agencies, he notes:

The commentary we continually hear is that most aren’t pushing their clients to increase their budgets on Twitter or are actively steering clients away from Twitter all together. While there is still some interest around live events, it has become clear that Twitter is not viewed as a must have, always-on ad buy and we don’t see that sentiment shifting at this point.

Most of the usability and design changes Twitter has made over the past year, including the introduction of features like Moments—in which human editors curate news topics—are designed to both attract new users and boost the engagement levels of existing users. Twitter has also argued that the real value of the network isn’t the 310 million logged-in users, but the almost 1 billion who see and interact with tweets somewhere else without being logged in.

That argument might be working with some advertisers, Nathanson says, but not enough of them. “While initiatives like the monetization of logged-out users and courting direct response advertisers through ROI and measurement partnerships like the DoubleClick integration could lead to some stabilization and possibly upside,” he said, they are probably “too little, too late.”

But surely some company like Google or Apple must be interested in acquiring the company? After all, Twitter is about $40 billion cheaper than it was when it went public in 2013. Not so fast, says Nathanson. Twitter is “less and less of a must have for a small pool of potential acquirers,” the analyst writes. Even at $15 billion or so, an acquisition is “still likely too big for the risk/reward to make sense for most.”

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The biggest problem for Twitter is that in trying to expand the number of its users and its advertising business, it is running into more and more competition. Much of that is coming from Facebook (FB), which has copied many of the service’s features and is expanding rapidly into live video (a market Twitter also plays in with Periscope and Vine), as well as Snapchat. The latter is rumored to be raising a new round of financing that values it $20 billion.

Nathanson also said he believes Twitter’s management is not doing what is necessary to correct the company’s core problems. “We don’t think management grasps the urgency of its situation and seems content to pat itself on the back for continually beating self-generated bottom line forecasts. Given the struggle to grow users and advertisers, vigorous investment should be the focus,” the analyst said.