Richard Greenfield, BTIG media and technology analyst shared why Facebook Inc. (NASDAQ:FB) is a more attractive stock than Twitter Inc. (NYSE:TWTR) on CNBC’s “Squawk on the Street.”
Greenfield said that even though the social media giant, Facebook Inc. (NASDAQ:FB) beat market estimates with its quarterly results, Twitter was different story and advised caution on the stock. According to him, Twitter Inc. (NYSE:TWTR) is certainly driving revenues, but it is facing challenges with expanding its user base.
Social media has addressed aptly the limited reach of television advertising and the need for flexibility by advertisers and has provided them with a powerful new platform to reach target audiences on their mobile phones. Facebook Inc. (NASDAQ:FB) and Google Inc. (NASDAQ:GOOGL) are the top choices for any advertiser, given their ever increasing number of users and smooth transition to the mobile platform. However, Greenfield noted that, Twitter Inc. (NYSE:TWTR) lagged quite behind with respect to users and such changes, which dimmed its growth outlook.
“They (Twitter Inc. (NYSE:TWTR)) are definitely improving the monetization. The challenge is the users. The users are still far smaller and growing pretty slowly, relative to what we are seeing at Facebook Inc. (NASDAQ:FB). And that is the real challenge. How big can Twitter be?” Greenfield said.
Greenfield believes that Facebook Inc. (NASDAQ:FB) can still increase its already massive market capitalization of $195 Billion. He noted that the company reported incredible advertisement revenues in the last quarter, which were more than the sum of media giants like Time Warner Inc. (NYSE:TWX) and Viacom, Inc. (NASDAQ:VIAB) put together. He said that the fact that the company was growing at 60 per cent plus even with such scales of numbers was impressive.
All in all, Greenfield recommended Facebook Inc. (NASDAQ:FB) given its performance and potential, and feels Twitter Inc. (NYSE:TWTR) still has to build upon its user numbers.
Disclosure: None
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