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Any time an analyst initiates or upgrades a stock and accompanies that recommendation with a long term positive outlook, a stock can see a considerable increase in its share price within just a few minutes of that note. With that said, I wanted to focus on two social media stocks that were initiated with new coverage in the last 24 hours and some of the variables long-term growth investors should consider.

Open Table (NASDAQ:OPEN) had its coverage initiated by Macquarie who rated the company an "Outperform" at current levels and set a $53.00/share price target. According to Yahoo! Finance, the San Francisco, California based firm,

provides restaurant reservation solutions in the United States, Canada, Germany, Japan, Mexico, and the United Kingdom. It offers solutions that form an online network connecting reservation-taking restaurants and people who dine at those restaurants. The company provides electronic reservation book [ERB] that combines proprietary software and computer hardware to deliver a solution, which computerizes restaurant host-stand operations.

I think that the continued development of the company's Electronic Reservation Book and customer feedback solutions are going be key factors when it comes to the success of OPEN, but many investors should also examine the company's fundamentals over the last 12 months. If we examine the company's profit (14.36%) and operating margins (21.84%) we'll notice that it clearly trumps some of the bigger social networking names in the sector such as Yelp (NYSE:YELP) which only managed to demonstrate a negative profit margin of -22.92% and a negative operating margin of -16.69%.

GRPN (NASDAQ:GRPN) had its coverage initiated also by Macquarie who rated the company 'Neutral' at current levels and set an $6.00/share price target. The Chicago, Illinois-based company operates as

a local commerce marketplace that connects merchants to consumers by offering goods and services at a discount in North America and internationally. The company sends daily emails to its subscribers regarding discounted offers for goods and services that are targeted by location and personal preferences.

According to I3 Investor.com, several other analyst firms have also weighed in on the stock with coverage initiations. Analysts at Credit Suisse initiated coverage on shares of Groupon in a research note to investors on Wednesday. They set a "neutral" rating on the stock. Separately, analysts at Piper Jaffray initiated coverage on shares of Groupon in a research note to investors on Monday, September 17th. They set a "neutral" rating and a $6.00 price target on the stock. Finally, analysts at Jefferies Group initiated coverage on shares of Groupon in a research note to investors on Tuesday, September 4th. They set a "hold" rating and a $4.75 price target on the stock."

Why the sudden spike in coverage? The company is maturing in a sense by reinvesting itself with a new logo and entry into the POS (Point-of-Sale) sector. According to Minyanville;

Groupon's entry is particularly interesting because it's competing directly with Square in the race to turn every cash register in the world into an iPad. Groupon's most recent purchase, a company called Breadcrumb, just completed a successful pilot run here in New York and has already begun to national.

Final Analysis

Potential investors looking to establish a position in either OPEN or GRPN should do so with a small to moderate position and add to that position as both companies' developments begin to enhance bottom line numbers. OPEN and GRPN have very promising potential, but the tech bug has been known to bite, and if either company falters as a result, share prices could drop considerably.

Source: 2 Social Media Stocks Worth A Look In The Wake Of New Analyst Coverage