Twitter Inc. (NYSE:TWTR) received an uplift in the market after analysts at JPMorgan Chase & Co. (NYSE:JPM) upgraded the stock to an Outperform with a $49 share, price target. CNBC’s, Joshua Brown, reiterated that the ongoing monetization of users is the only thing that is making the stock remain attractive to many investors as a long-term play.
A share price target of $49 is still low compared to highs of $75 a share that the stock clocked last year as concerns over stagnating business continue to mount more pressure. On a research note to investors, JPM noted that Twitter is doing all that is needed to differentiate its content with more product enhancements that are expected to expand profit margins.
Brown, who is long on the stock, admits the stock has been an underperformer having not performed as expected especially on the user growth front.
“I think if they get the ad product right it will go a long way toward calming people down over the fact that it does not grow as fast as Instagram or whatever,” said Mr. Brown.
Stephanie Link also remains long on Twitter Inc. (NYSE:TWTR) maintaining that the giant social network is in line to grow its revenue by 70% this year with margins also poised to expand. Link remains bullish on the company’s upside potential on the fact that its ad loads currently stands at 1.5% compared to Facebook Inc. (NASDAQ:FB)’s 5%.
“I think the analyst are making the call on you know what fourth quarter monthly active users we know how weak they are going to be. It is in the stock at the current valuation, and they do have substantial growth opportunities going forward,” said Mrs. Link.
A debate has been raging on whether current CEO, Dick Costolo, should part ways with the company, with many analysts of the opinion that the current woes engulfing the company come down to his leadership. Link admits Twitter would definitely rally if there were a change at the helm.
Most of the success that Twitter has enjoyed especially on a 70% growth in revenue has been attributed to CFO who Mrs. Link believes would be a perfect fit for the company going forward.
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