NEW YORK (TheStreet) -- Shares of Twitter (TWTR) - Get Twitter, Inc. Report were gaining 5.8% to $51.27 Tuesday afternoon on heavy trading volume.

About 26.9 million shares of the social media company were traded by 2:16 p.m. Tuesday, above the company's average trading volume of about 19.7 million shares a day.

Twitter recently announced that it is testing a new a new "quality filter" for verified users, according to The Verge. The new feature will help "remove all tweets from your notifications timeline that contain threats, offensive or abuse language, duplicate content, or are sent from suspicious accounts," according to Twitter.

Twitter recently admitted that it hasn't done a great job at combatting abuse and harassment on its service.

The social network also recently started testing video ads that autoplay in its iOS apps, according to Advertising Age. Some users will see Promoted Video ads that automatically play without sound during the test, similar to ads that automatically play with no sound on Facebook's (FB) - Get Facebook, Inc. Class A Report mobile apps.

Insight from TheStreet's Research Team:

TheStreet Recommends

Twitter is a core holding of Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. During the most recent weekly roundup, this is what Jim Cramer, Portfolio Manager & Jack Mohr, Director of Research - Action Alerts PLUS had to say about the stock:

Twitter (TWTR:NYSE; 1,400 shares; 2.37%; Sector: Technology): Shares traded sharply higher this week on little news. Over the past two weeks, we have heard more and more about the potential for a "Verified Twitter" service and are increasingly inclined to the concept, which has a strong likelihood of being rolled out later this year. The new feature would charge users to become verified (i.e., $1 per year or a one-time $5 fee) in exchange for lower ad load and the ability to uniquely interact with other verified users. Users would be able to select not to see communications from unverified users without permission. Businesses could also pay to become verified (i.e., a one-time $100 fee), which would add validation, credibility and direct conversations to the correct account.

Verified Twitter has a few important benefits. For one, Twitter would address the ongoing concern about anonymous abuse and negative comments that deters participation. Secondly, Twitter would collect credit card and other targetable data from its most active users. Finally, Twitter would have a new revenue source. If 10% of monthly active users (MAUs) paid for verification, it would produce $30 million annually from users. If 10% of businesses paid to be verified, it would produce $300 million in revenue, assuming there are 60 million businesses in high-income countries and that 50% of businesses use Twitter. We'll see what happens with Verified Twitter, but we think it should be added to the list of potential 2015 revenue catalysts. The list, which keeps us bullish on the name in the near term, includes video, app install/re- engagement ads, a buy button and the logged-out site.

Longer term, the company must address deeper engagement issues, but in the near term, product cadence has accelerated and management has a more bullish tone than the Street, which gives hope that it can improve engagement. We reiterate our $55 target.

-Jim Cramer and Jack Mohr, "Weekly Roundup," originally published 3/20/15 on ActionAlertsPlus.com

Separately, TheStreet Ratings team rates TWITTER INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TWITTER INC (TWTR) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TWTR's very impressive revenue growth greatly exceeded the industry average of 18.6%. Since the same quarter one year prior, revenues leaped by 97.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TWITTER INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TWITTER INC continued to lose money by earning -$0.96 versus -$1.05 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus -$0.96).
  • Despite currently having a low debt-to-equity ratio of 0.44, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 10.26 is very high and demonstrates very strong liquidity.
  • Compared to other companies in the Internet Software & Services industry and the overall market, TWITTER INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • TWTR has underperformed the S&P 500 Index, declining 6.46% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • You can view the full analysis from the report here: TWTR Ratings Report