Twitter and Facebook comparisons are not valid on the grounds that the social networks offer different products. Also there is a huge difference between the numbers of users on each platform, notes Brean Capital analyst Sarah Hindlian. In a research note earlier this week, the firm initiated coverage on the micro-blogging site with a Buy rating and a price target of $61 per share.
Comparison with Facebook not valid
Facebook is primarily used to connect with friends and family, while people use Twitter to stay updated with the latest global events, topics and conversations that are “relevant or interesting to them, without the need to ever be active,” notes Hindlian.
Overall, the analyst said they do not expect Twitter to hit the same number as users as Facebook, and also there is no need for the micro-blogging site to seek parity with the rival social network as both serve “extremely” different businesses.
According to Hindlian, new products from Twitter to facilitate mobile app development, online video, syndicated ads, etc. “are just ramping, while the company improves the user experience and starts to monetize the vast logged-off user base, leading to potential upside to come.”
Twitter in midst of “long game”
Twitter is in middle of a “long game” which was not expected to be “linear” but could provide positive results for the company, states Hindlian. Monetizing logged-out users, syndicated ads and its Fabric platform offer potential opportunities for Twitter going forward.
Apart from Brean Capital, many other research firms have released their verdicts on Twitter. In a research note on March 9, analysts at JPMorgan Chase reiterated a Positive rating on the stock. Analysts at Zacks, in a research note on March 4, reiterated a Neutral rating on the micro-blogging site with a price target of $50. Analysts at Vetr raised their rating on the stock from Sell to Hold and gave it a price target of $52.23 in a note issued on March 2. Axiom Securities analysts initiated coverage on the micro-blogging company in a research note on March 2, setting a Buy rating and a price target of $60. Twitter presently has an average rating of Hold and an average price target of $52.86.
On Thursday, Twitter shares closed up 1.55% at $47.93, and year to date, the stock is up by over 33%.