Twitter (TWTR) and Facebook (FB), two of the biggest names in social media, report quarterly earnings this week.
“For us, Twitter really is real-time broadcast medium. This is the way in which information is being disseminated to more broad audiences,” said Eric Sheridan, analyst at UBS Securities (UBS).
Despite a rough first quarter for the micro-blogging site, the stock analyst is still bullish on Twitter with a “buy” rating and price target set at $50 a share. “We think the platform strength wins out in the long run, while they have to continue to think about users and advertising revenue in the medium term,” said Sheridan.
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Facebook releases its quarterly results after the bell on Wednesday. The Street is expecting $0.47 a share with revenue at $4 billion. The stock has performed exceptionally well, up more than 20% year-to-date. UBS has a “buy” rating for Facebook and a price target set at $92 a share. The firm also “recently raised our revenue estimates for Facebook on the back of video, Instagram,” said Sheridan.
The analyst is confident, “there are a number of levers Facebook can pull for continued stronger advertiser growth, in the years to come.”
Advertising revenue growth is the metric Sheridan will be keeping an eye on when Facebook reports earnings. “If they’re able to have similar or slightly slower growth than last quarter, that will be better than the Street expectations,” he said.
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