Rosenblatt Securities Says Twitter To See Revenue Growth Upside, Initiates At Buy

In a report published Thursday, Rosenblatt Securities analyst Martin Pyykkonen initiated coverage of Twitter, Inc. (NYSE: TWTR) with a Buy rating and $60 price target as the company is now well positioned for a revenue growth and EBITDA margin expansion breakout.

Pyykkonen noted six key points to support his bullish outlook:

• Advertising monetization growth has exceeded user and usage growth.
• Global sales force is reaching "critical mass" with direct sales in 73 countries.
• Video clips ads should be in demand from large advertisers.
• The frequency of technology innovation and new product rollout is increasing.
• Efforts to reduce complexity for new and low frequency users are effective.
• Twitter is reducing the complexity in reporting metrics for financial measurement.

"We think Twitter has an attractive fundamental long-term opportunity to further develop advertising monetization, primarily through targeted advertising and as well this year and beyond with brand advertisers," Pyykkonen wrote. "Targeted performance-based and direct response ads are well proven in the marketplace and have been the main driver in Twitter's advertising revenue growth so far."