Twitter (TWTR) - Get Report was upgraded to buy from hold by a Truist analyst who cited the microblogging service's higher-growth revenue estimates and "the most exciting product roadmap we’ve ever seen."
Shares of the San Francisco company at last check were up 2.6% to $62.83.
Analyst Youssef Squali, who raised his price target on the shares to $74 from $64, said in a research note that he had grown "incrementally positive on Twitter."
The analyst said Twitter's progress on product and tech platform improvements in the past 12 months have yielded faster growth in users compared with a year earlier.
"Fourth-quarter 2020 [showed] the fastest year-over-year revenue growth we've seen in over two years," the analyst said.
"The strategic decision to rebuild its core ad server and revamp its tech stack in an effort to enhance the product for consumers and advertisers" is "finally paying off for Twitter," Squali said.
Improvements to Twitter's tech platform, the analyst said, "have led to a ramp in product development velocity, which drove faster product introduction, the main underlying catalyst to the recent improvements in engagement metrics."
Squali called Twitter's Topics "the most influential product improvement thus far."
"Topics has alleviated the issue of people needing to follow individual accounts to stay up-to-date on various topics, and instead follow any of the 6,000+ (and growing) topics," he said.
The analyst also said Twitter's rollout of its Fleets sharing format in the fourth quarter" is being underappreciated by investors, given that it is very early in its life cycle."
"Whereas consumers generally use Facebook (FB) - Get Report and Snap (SNAP) - Get Report Stories to post media (pictures/short clips) of themselves and view media of others," Squali said, "we believe consumers use Fleets to post messages they want to convey to their audience or conversation topics they want to discuss (while still predominantly being in media format)."
As such, he added, "consumers use Fleets in complementary ways to engage in direct conversation."
Earlier this month, Citigroup analyst Jason Bazinet lifted his price target on Twitter by $25, to $80, while maintaining his neutral rating on the stock. He cited the company's recent investment plans that it hopes will boost revenue growth.