Twitter Inc TWTR is rallying quite a bit going into its earnings, following a host of good news. MKM Partners analyst Rob Sanderson thinks that the stock is all set to rally 63 percent this year alone. Sanderson was on CNBC Tuesday, February 3 to explain why.
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Why Do You Think Twitter Will Rally 63 Percent This Year?
“There’s lots of enthusiasm for the top-line story -- the monetization,” Sanderson said, “ the ad effectiveness -- is sort of undebatable right now. The question is: is this a sustainable network? Or is it going to drop into oblivion.”
“I think this is the year we start the product improvement, turn the trajectory of user growth. If that’s correct, then I think there will be a pretty meaningful revaluation of the stock higher.”
Are Stories Of Dick Costolo's Potential Firing Still Impacting The Company?
“I think his future lives and dies by whether he can turn the user growth trajectory. If we do turn around and start to see more accelerated growth in 2015 then he is considered a good CEO and if he doesn’t then they’ll probably show him the door,” Sanderson replied.
Related Link: Angel Investor Jason Calacanis On Twitter: Firing Dick Costolo Is A 'Huge Mistake'
Are Facebook Growth And Twitter’s Growth Related?
“I think the interesting thing about
Facebook this quarter was they didn’t see any discoloration in the U.S. market. They had a lot of currency headwinds and the U.S. was much stronger [...] and more than offset the effect of FX,” Sanderson said.
“Twitter’s growth in the U.S. market has been much faster than Facebook over the last several quarters, and they have lot less international exposure. So, should that trend in just strong U.S. social continues, [...] Twitter has more exposure to that.”
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