Shares of Twitter were gaining 1.1% to $37.47 in pre-market trading.
The analyst firm set a price target for $44 for the social media company. The rating and price target are based on a valuation call, according to Argus analysts.
Exclusive Report: Jim Cramer's Best Stocks for 2015
Argus analysts said that Twitter's shares, which they note are near 52-week lows, do not reflect the company's positive fundamentals, which include continued growth in the number of users and more rapid monetization of user growth from advertising dollars.
The analyst firm believes Twitter has a "deep competitive moat" due to its tight focus on concise messaging, a message size that's ideal for smartphones, and its adoption by celebrity culture.
Separaetly, TheStreet Ratings team rates TWITTER INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate TWITTER INC (TWTR) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been generally deteriorating net income."