Twitter shares are “mid-way” on the road to recovery, believes Canaccord analyst Michael Graham, who made the comment in a report on Monday. The analyst, after meeting with management, reiterated his Buy rating on the stock with a price target of $56.

Twitter DM

Benefiting on many fronts

Graham stated that the micro-blogging site is determined to deliver results on key initiatives to drive ahead the user and advertiser experiences outlined at its analyst day. Also the analyst noticed that the number of features offered for users is surging at a quick and consistent pace, with many features already launched and many more in the pipeline.

According to Graham. the stock is “mid-way through a process of winning back investors after a rough end to 2014.”

One of the important points outlined by Graham is that Twitter’s management is confident about the micro-blogging platform’s monthly active users (MAUs) hitting the 13 million level again. The level was last achieved in the first half of 2014. Graham believes Twitter has the “most margin upside in the sector” and expects more dynamic EPS growth for the company in the coming years.

Commenting on Twitter’s monetization strategy, Graham suggested that it was “low risk,” as it is based on the same principles as that of Facebook, and he said that Twitter “should be a natural beneficiary of advertisers looking for new social channels as prices for Facebook ads increase.”

Twitter’s terms with Google would also help the company enhance growth and may “lead investors to more dearly value Twitter’s vast logged-out audience (288M MAUs, but ~500M logged-out visitors),” notes Graham.

JP Morgan also bullish on Twitter

JP Morgan Chase also went bullish on Twitter on Monday, suggesting that the stock still has tremendous upside potential. JP Morgan has assigned an Overweight rating on the stock with a price target of $67. Analyst Doug Anmuth is bullish on the stock, noting that the new product releases like video, Instant Timeline and others will drive user growth and increase the overall site experience.

Anmuth believes overall investor sentiment on the micro-blogging site has improved since the fourth quarter earnings report but that “considerable skepticism remains & Twitter’s risk/reward is very compelling.”

Twitter will evolve “beyond a text-based 140 character tweet platform into something much more engaging,” suggested Anmuth.