Goldman Sachs maintained a Buy rating on Weibo Corp (NASDAQ: WB) with a price target of $24. Comments follow Q1 results. Analyst Piyush Mubayi noted impressive traffic.

"Weibo delivered impressive improvement of user engagement in the eventful 1Q. Monthly active users (MAU) grew 34% yoy to 143.8mn, with 70% on mobile. Daily active users (DAU) grew 37% to 66.6mn. Total number of feeds exceeded 3.1bn by March from 2.8bn last Dec, indicating active engagement of users and content partners. The positive traffic trend was also attributable to Weibo’s adjustment to its product strategy, particularly regarding content creation, where the platform emphasized the “discovery” function that connects audience with professional publishers, and enabled users to post long-form content," said Mubayi.

"Management highlighted the focus on lower tier cities: Weibo has improved its mobile interface to match social messenger apps’ convenience of usage, which we believe is important in driving engagement in low-tier markets. Weibo also plans to deploy marketing staff in these cities to form collaboration with local media partners, such as TV stations. Monetization progressed on the back of strong traffic. Weibo’s native ad platform Fen-Si-Tong has generated US$28mn revenues since launch in 2Q13. In 1Q, Fen-Si-Tong generated 19% of Weibo’s ad revenues at 1% ad load. Mgmt plans to open the self-service platform to large brands 2Q14 onwards. We fine-tune estimates but maintain our 18-month PEG-based TP of US$24," added the analyst.

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Shares of Weibo Corp closed at $20.25 yesterday.