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Twilio Inc.

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Twilio offers cloud-based software that helps developers make and receive phone calls, text messages and video chats. Estimates for the stock have remained unchanged, of late. The company’s key initiatives, which include product innovation, global expansion and acquisitions, are helping it in gaining customers, which bodes well for long-term growth. However, we are concerned about its declining gross margins which worsened during the last reported quarter, touching its lowest level in the last three years. The company’s gross margins have been negatively impacted by shift in international traffic mix and reduced revenue contribution from Uber. Going ahead, intensifying competition in the communications market and growing prevalence of in-app push notifications are other major headwinds. Notably, the stock has underperformed the industry in the last one year.

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