S&P Analyst: Twitter Still A Growth Play

Scott Kessler of S&P Global Market Intelligence was a recent guest on CNBC and discussed his views of Twitter Inc TWTR ahead of its Tuesday print.

Kessler discussed why he is maintaining a Buy rating with a $21 price target on Twitter's stock heading into the earnings results. The analyst noted that there are 3 factors to support a bullish stance:

• 1) The company is expected to show continued earnings and revenue growth and is expecting 40 to 45 percent in both earnings and revenue.
• 2) The company has made recent positive changes to its management team.
• 3) The stock is looking "very appealing" at 35 times his expected earnings for 2016.

"This actually is a growth company in many ways," Kessler said.

On the other hand, Kessler highlighted several risks that could affect Twitter's business. Specifically, monthly user growth has been "non existent," while other social media companies, such as Snapchat, have been gaining traction and user growth.

Bottom line, Kessler thinks that Twitter's growth expectations and cheap valuations make the stock an attractive investment.