When Twitter (NYSE:TWTR) went public, the stock was priced at $26 per share and at a valuation that factored in huge growth. Just over a year and a half later, shares trade at $35, or about 35% higher. So why do the media and the Street seem to believe Twitter CEO Dick Costolo -- who recently announced that he is stepping down -- hasn't lived up to expectations?

Twitter stock during Costolo's reign
Despite Twitter's pricey valuation of 9.5 times sales today and its 35% gain from its IPO price, the consensus is that Twitter stock has underperformed. The main source of disappointment is straightforward: While the stock's IPO was priced at $26, shares soared during the first day of trading, closing at about $45. With this in mind, since the end of Twitter's first day of trading, shares are actually down more than 20%.

Another reason for investors to be disappointed in the stock is the relative outperformance of social network peer Facebook during this time. By navigating monetization expertly, continuing to grow its user base at a healthy pace despite the platform's already large size, and achieving heady levels of profitability, Facebook stock has soared more than 80% since Twitter's IPO.

TWTR Chart

Twitter vs. Facebook Stock Performance, data by YCharts.

But did Costolo do as badly as the underperforming stock price suggests?

Twitter's business under Costolo
Critics point to slower than expected user growth as Twitter's biggest problem since the company went public. With the stock performing so poorly during a bull market and in the face of Facebook's soaring stock price, the Street seems to have put much of the blame on Costolo.

Recently, Twitter's user numbers have grown by about 5%, quarter over quarter. Year-over-year growth rates have been about 20% in recent quarters. While these are certainly meaningful growth rates, they don't make Twitter look like it can appeal to the masses. At 302 million monthly active users -- far behind Facebook's 1.4 billion users -- this slower than expected growth has led some investors to conclude that Twitter's audience size might be limited compared to other popular social networks.

But a look at Twitter's success at monetization since the company went public paints quite a different picture. Through effective monetization of its users, Twitter's revenue is soaring. First-quarter revenue, for instance, was up a whopping 74% from the year-ago quarter. Twitter's revenue has spiked rapidly under Costolo's leadership since the IPO.

TWTR Revenue (Quarterly YoY Growth) Chart

TWTR Revenue (Quarterly YoY Growth), data by YCharts.

Twitter's excellent improvements in monetization are driving this revenue growth. Since Twitter went public, the company's advertising revenue per 1,000 timeline views has leaped from $2.58 to about $5.65. New and refined ad products, as well as new measures to engage users, have helped Twitter capture significantly more advertising revenue each year.

Twtr Adpu

Chart source: Twitter.

Taking into account Twitter's exceptional user monetization improvements during Costolo's time at the company's helm, it can certainly be argued that he hasn't done as poorly as the media and the underperforming stock price suggest.

Less than two years might also be too short a time frame to really know if Costolo's initiatives were subpar. Is it really fair to judge a CEO based on such a short history of performance?

Ultimately, Costolo is the victim of high expectations. With the stock soaring during Twitter's first day as a publicly traded company, the market set the bar high from day one. Excellent monetization and consistent but not-so-stellar user growth just wasn't enough for investors who expected Twitter to quickly prove it can achieve greater popularity with a much larger audience.

Daniel Sparks has no position in any stocks mentioned. The Motley Fool both recommends and owns shares of Facebook and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.