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Here's Why Twilio (TWLO) Stock is a Solid Portfolio Pick Now
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Twilio's (TWLO - Free Report) shares soared 32.4% after its third-quarter fiscal 2023 earnings release, driven by strong performance. The surge showcases investors' trust in TWLO’s programmable communication capabilities, cloud engagement platform and solid fundamentals.
Why Should You Invest in Twilio?
Twilio's earnings outpaced estimates in each of the trailing four quarters, delivering an average surprise of 157.84%. This indicates that the company has an impressive track record of exceeding earnings estimates.
The stock trades at an attractive valuation multiple. It is trading at a one-year forward price-to-sales multiple of 3.04X compared with its five-year average of 11.05X.
The Zacks Consensus Estimate for 2023 earnings is pegged at $2.16 per share, indicating a significant year-over-year improvement from a loss of 15 cents. For 2024, the consensus mark for earnings is pegged at $2.38 per share, indicating a year-over-year increase of 10.14%. Moreover, Twilio has a long-term earnings growth expectation of 46.80%.
The stock carries a Zacks Rank #2 (Buy) and has a Growth Score of A at present. The Growth Style Score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or 2 and a Growth Score of A or B offer solid investment opportunities.
Long-Term Growth Drivers
Twilio is benefiting from the increased adoption of cloud communication services as businesses are shifting toward hybrid working trends. The increased initiative taken by the companies toward digital transformation is also driving the demand for its products, including Segment, Engage and Flex.
The company's continued focus on strengthening its portfolio and offering innovative products has led to the acquisition of Boku Identity, Sendgrid and Segment. As a result, the company has been able to rapidly add more customers and expand its global footprint.
TWLO’s programmable messaging offering is likely to witness considerable growth, driven by a rise in the global Application-to-Person SMS market. A report by Grand View Research suggests that the global Application-to-Person SMS market is anticipated to witness a CAGR of 4.9% from 2023 to 2030.
Twilio is also focusing on enhancing profitability by efficiently managing costs. Through its Restructuring Plan announced in September 2022, the company has successfully reduced the global workforce by more than 25%. This strategy has proven effective, leading to a robust year-over-year increase in non-GAAP earnings per share over the last three quarters.
The company is also venturing into the market of artificial intelligence (AI) with its new Customer AI technology. The company has launched Twilio Voice Intelligence and Customer AI Predictions under its Customer AI strategy. TWLO also launched Twilio Flex contact center based on GenAI Agent Assist in the fourth quarter of 2023.
Twilio also has a long lineup of products for the upcoming quarters and fiscal year. These AI-based products include Flex Unify, CustomerAI Generative Journeys, CustomerAI Generative Email, Branded Calling, SendGrid Engagement Quality and FraudGuard.
The company’s solid portfolio and strong fundamentals make it a lucrative stock for long-term gains.
The Zacks Consensus Estimate for Blackbaud's fourth-quarter 2023 earnings per share has declined 4 cents to $1.04 in the past 90 days. Shares of BLKB have returned 33.8% in the past year.
The Zacks Consensus Estimate for BlackLine’s fourth-quarter 2023 earnings has moved northward a penny to 55 cents per share in the past 30 days. Shares of BL have lost 13.6% in the past year.
The Zacks Consensus Estimate for Arista Network’s fourth-quarter 2023 earnings has moved north 13 cents to $1.70 per share in the past 90 days. Shares of ANET have rallied 120.6% in the past year.
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Here's Why Twilio (TWLO) Stock is a Solid Portfolio Pick Now
Twilio's (TWLO - Free Report) shares soared 32.4% after its third-quarter fiscal 2023 earnings release, driven by strong performance. The surge showcases investors' trust in TWLO’s programmable communication capabilities, cloud engagement platform and solid fundamentals.
Why Should You Invest in Twilio?
Twilio's earnings outpaced estimates in each of the trailing four quarters, delivering an average surprise of 157.84%. This indicates that the company has an impressive track record of exceeding earnings estimates.
The stock trades at an attractive valuation multiple. It is trading at a one-year forward price-to-sales multiple of 3.04X compared with its five-year average of 11.05X.
Twilio Inc. Price and Consensus
Twilio Inc. price-consensus-chart | Twilio Inc. Quote
The Zacks Consensus Estimate for 2023 earnings is pegged at $2.16 per share, indicating a significant year-over-year improvement from a loss of 15 cents. For 2024, the consensus mark for earnings is pegged at $2.38 per share, indicating a year-over-year increase of 10.14%. Moreover, Twilio has a long-term earnings growth expectation of 46.80%.
The stock carries a Zacks Rank #2 (Buy) and has a Growth Score of A at present. The Growth Style Score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or 2 and a Growth Score of A or B offer solid investment opportunities.
Long-Term Growth Drivers
Twilio is benefiting from the increased adoption of cloud communication services as businesses are shifting toward hybrid working trends. The increased initiative taken by the companies toward digital transformation is also driving the demand for its products, including Segment, Engage and Flex.
The company's continued focus on strengthening its portfolio and offering innovative products has led to the acquisition of Boku Identity, Sendgrid and Segment. As a result, the company has been able to rapidly add more customers and expand its global footprint.
TWLO’s programmable messaging offering is likely to witness considerable growth, driven by a rise in the global Application-to-Person SMS market. A report by Grand View Research suggests that the global Application-to-Person SMS market is anticipated to witness a CAGR of 4.9% from 2023 to 2030.
Twilio is also focusing on enhancing profitability by efficiently managing costs. Through its Restructuring Plan announced in September 2022, the company has successfully reduced the global workforce by more than 25%. This strategy has proven effective, leading to a robust year-over-year increase in non-GAAP earnings per share over the last three quarters.
The company is also venturing into the market of artificial intelligence (AI) with its new Customer AI technology. The company has launched Twilio Voice Intelligence and Customer AI Predictions under its Customer AI strategy. TWLO also launched Twilio Flex contact center based on GenAI Agent Assist in the fourth quarter of 2023.
Twilio also has a long lineup of products for the upcoming quarters and fiscal year. These AI-based products include Flex Unify, CustomerAI Generative Journeys, CustomerAI Generative Email, Branded Calling, SendGrid Engagement Quality and FraudGuard.
The company’s solid portfolio and strong fundamentals make it a lucrative stock for long-term gains.
Other Stocks to Consider
Some other top-ranked stocks from the broader technology sector are Blackbaud (BLKB - Free Report) , BlackLine (BL - Free Report) and Arista Networks (ANET - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Blackbaud's fourth-quarter 2023 earnings per share has declined 4 cents to $1.04 in the past 90 days. Shares of BLKB have returned 33.8% in the past year.
The Zacks Consensus Estimate for BlackLine’s fourth-quarter 2023 earnings has moved northward a penny to 55 cents per share in the past 30 days. Shares of BL have lost 13.6% in the past year.
The Zacks Consensus Estimate for Arista Network’s fourth-quarter 2023 earnings has moved north 13 cents to $1.70 per share in the past 90 days. Shares of ANET have rallied 120.6% in the past year.