Canaccord Met With Twitter Management: Here's What Happened

Canaccord commented on Twitter Inc TWTR Monday following meetings with management. The firm maintained a Buy rating and $56 price target.

Analyst Michael Graham believed the stock was "mid-way through a process of winning back investors after a rough end to 2014."

According to Graham, Twitter continued to "deliver on key initiatives to enhance user and advertiser experiences outlined at its analyst day." The analyst also felt that innovations for users were "happening at a rapid and sustained pace, with several full launches, a few in the test phase, and more planned."

Confidence In MAUs

A the key point that Graham highlighted was management's confidence that Monthly Active Users (MAU) would return to the 13 million level last seen in the first half of 2014 and that a reduction in churn would help results.

The analyst note indicated that Twitter's relationship with Google Inc GOOG GOOGL should also help drive revenue growth and may "lead investors to more dearly value Twitter's vast logged-out audience (288M MAUs, but ~500M logged-out visitors)."

Facebook Roadmap

Commenting on Twitter's monetization strategy, Graham believed it was "low-risk" as it followed a roadmap similar to Facebook Inc FB and that Twitter "should be a natural beneficiary of advertisers looking for new social channels as prices for Facebook ads increase".

Graham concluded that Twitter has "the most margin upside in the sector" and expected "more dynamic EPS growth" from the company in the years ahead.

Twitter recently traded at $47.81, up 2.27 percent.