We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should Twilio (TWLO) be in Your Portfolio Ahead of Q1 Earnings?
Read MoreHide Full Article
Twilio Inc. (TWLO - Free Report) , a cloud communication and customer engagement solution provider, is set to report first-quarter 2024 results on May 7.
The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 84.5%.
Twilio projects non-GAAP revenues in the $1.025-$1.035 billion band (midpoint of $1.03 billion) and non-GAAP earnings per share in the 56-60 cents band (midpoint of 58 cents) for the first quarter of 2024.
The Zacks Consensus Estimate for Twilio’s first-quarter earnings has remained unchanged at 60 cents per share over the past 60 days and indicates an improvement of 27.7% from the year-ago quarter’s earnings of 47 cents. The consensus mark for revenues stands at $1.03 billion, which calls for a 2.4% increase from the year-ago quarter.
Twilio's year-to-date (YTD) share price performance has been marked by significant volatility, reflecting broader market fluctuations and company-specific developments. YTD, TWLO stock has declined 18.5%, underperforming the Zacks Internet – Software industry’s growth of 9.6%.
The stock has declined significantly since its fourth-quarter 2023 earnings release on Feb 14 due to a lower-than-expected revenue forecast for the first quarter of 2024. Twilio’s sales growth has decelerated over the last few quarters due to softened IT spending as customers are pushing or postponing their large IT investment plans in the ongoing uncertain macroeconomic environment and geopolitical issues.
Twilio's leadership position in the cloud communications market and focus on innovation and expansion makes it a strong buy candidate. With the company gearing up to report its first-quarter earnings, let’s evaluate why it is the right time to buy this cloud communication solution provider.
Strong Market Position
Twilio's core offering, its cloud communications platform, continues to gain traction among businesses seeking to enhance their customer engagement capabilities. The company's developer-friendly application programming interfaces enable seamless integration of messaging, voice and video functionality into a wide range of applications, empowering businesses to deliver personalized and immersive customer experiences.
Twilio's international expansion efforts present significant growth opportunities as businesses worldwide increasingly prioritize digital transformation and customer engagement initiatives. With a presence in more than 180 countries and partnerships with leading global enterprises, Twilio is well-positioned to capitalize on the growing demand for cloud communications solutions on a global scale.
Growth Opportunities
The market in which Twilio operates has a decent growth potential. The company’s main business, Programmable messaging, is likely to witness ample growth as the global Application-to-person (A2P) Messaging market is anticipated to grow at a CAGR of 2.8% from 2023 to 2030, according to a MarketsAndMarkets report. We believe that with sustained focus on developing products, along with global expansion plan, the company is well poised to grab this opportunity.
Twilio is also focusing on generative AI offerings to tap the growing opportunities in the space. In this regard, the company launched Customer AI technology in early June 2023, which powerfully combines customer engagement platform data, generative and predictive AI and large language models (LLMs) to unlock stronger customer relationships for brands. We believe that Twilio’s initiative to integrate generative and predictive AI technology across its platform will boost its revenue growth over the long run.
Moreover, Twilio's strong financial position and robust balance sheet provide a solid foundation for future growth and innovation. As of Dec 31, 2023, the company had cash and marketable securities of $4.01 billion, while the long-term debt totaled $989 million. With ample liquidity and no significant debt obligations, Twilio has the flexibility to invest in strategic initiatives, pursue acquisitions and capitalize on emerging opportunities in the cloud communications market.
Final Thoughts
We believe that Twilio's strong financial performance and strategic initiatives bode well for its prospects.
TWLO currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A at present. 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.
Moreover, the YTD decline in the share price has made TWLO stock attractive on the valuation front, too. The stock currently trades at 2.50X forward 12-month sales, significantly lower than the Zacks Computer and Technology sector’s average of 4.71X. Additionally, at a closing price of $61.89 on May 3, the stock trades approximately 21% lower to its 52-week high of $78.16.
Therefore, considering the company’s impressive growth profile, attractive Zacks Style Score and impressive valuation multiple, we believe it is the right time to invest in the stock.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised 10 cents upward to $23.94 per share in the past 30 days, which suggests year-over-year growth of 84.7%. The long-term estimated earnings growth rate for the stock stands at 30.9%. The NVDA stock has soared 79.3% YTD.
The Zacks Consensus Estimate for Salesforce’s fiscal 2025 earnings has been revised upward by 3 cents to $9.71 per share in the past 60 days, which calls for an increase of 18.1% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 17.4%. CRM shares have increased 4% YTD.
The consensus mark for Pinterest’s 2024 earnings has been revised upward by 9 cents to $1.43 per share over the past seven days, which indicates a 31.2% increase from 2023. It has a long-term earnings growth expectation of 23.4%. The PINS stock has increased 9.1% in the YTD period.
Image: Shutterstock
Should Twilio (TWLO) be in Your Portfolio Ahead of Q1 Earnings?
Twilio Inc. (TWLO - Free Report) , a cloud communication and customer engagement solution provider, is set to report first-quarter 2024 results on May 7.
The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 84.5%.
Twilio projects non-GAAP revenues in the $1.025-$1.035 billion band (midpoint of $1.03 billion) and non-GAAP earnings per share in the 56-60 cents band (midpoint of 58 cents) for the first quarter of 2024.
The Zacks Consensus Estimate for Twilio’s first-quarter earnings has remained unchanged at 60 cents per share over the past 60 days and indicates an improvement of 27.7% from the year-ago quarter’s earnings of 47 cents. The consensus mark for revenues stands at $1.03 billion, which calls for a 2.4% increase from the year-ago quarter.
Twilio's year-to-date (YTD) share price performance has been marked by significant volatility, reflecting broader market fluctuations and company-specific developments. YTD, TWLO stock has declined 18.5%, underperforming the Zacks Internet – Software industry’s growth of 9.6%.
Twilio Inc. Price and EPS Surprise
Twilio Inc. price-eps-surprise | Twilio Inc. Quote
The stock has declined significantly since its fourth-quarter 2023 earnings release on Feb 14 due to a lower-than-expected revenue forecast for the first quarter of 2024. Twilio’s sales growth has decelerated over the last few quarters due to softened IT spending as customers are pushing or postponing their large IT investment plans in the ongoing uncertain macroeconomic environment and geopolitical issues.
Twilio's leadership position in the cloud communications market and focus on innovation and expansion makes it a strong buy candidate. With the company gearing up to report its first-quarter earnings, let’s evaluate why it is the right time to buy this cloud communication solution provider.
Strong Market Position
Twilio's core offering, its cloud communications platform, continues to gain traction among businesses seeking to enhance their customer engagement capabilities. The company's developer-friendly application programming interfaces enable seamless integration of messaging, voice and video functionality into a wide range of applications, empowering businesses to deliver personalized and immersive customer experiences.
Twilio's international expansion efforts present significant growth opportunities as businesses worldwide increasingly prioritize digital transformation and customer engagement initiatives. With a presence in more than 180 countries and partnerships with leading global enterprises, Twilio is well-positioned to capitalize on the growing demand for cloud communications solutions on a global scale.
Growth Opportunities
The market in which Twilio operates has a decent growth potential. The company’s main business, Programmable messaging, is likely to witness ample growth as the global Application-to-person (A2P) Messaging market is anticipated to grow at a CAGR of 2.8% from 2023 to 2030, according to a MarketsAndMarkets report. We believe that with sustained focus on developing products, along with global expansion plan, the company is well poised to grab this opportunity.
Twilio is also focusing on generative AI offerings to tap the growing opportunities in the space. In this regard, the company launched Customer AI technology in early June 2023, which powerfully combines customer engagement platform data, generative and predictive AI and large language models (LLMs) to unlock stronger customer relationships for brands. We believe that Twilio’s initiative to integrate generative and predictive AI technology across its platform will boost its revenue growth over the long run.
Moreover, Twilio's strong financial position and robust balance sheet provide a solid foundation for future growth and innovation. As of Dec 31, 2023, the company had cash and marketable securities of $4.01 billion, while the long-term debt totaled $989 million. With ample liquidity and no significant debt obligations, Twilio has the flexibility to invest in strategic initiatives, pursue acquisitions and capitalize on emerging opportunities in the cloud communications market.
Final Thoughts
We believe that Twilio's strong financial performance and strategic initiatives bode well for its prospects.
TWLO currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A at present. 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.
Moreover, the YTD decline in the share price has made TWLO stock attractive on the valuation front, too. The stock currently trades at 2.50X forward 12-month sales, significantly lower than the Zacks Computer and Technology sector’s average of 4.71X. Additionally, at a closing price of $61.89 on May 3, the stock trades approximately 21% lower to its 52-week high of $78.16.
Therefore, considering the company’s impressive growth profile, attractive Zacks Style Score and impressive valuation multiple, we believe it is the right time to invest in the stock.
Other Stocks to Consider
Some other same-ranked stocks in the broader technology sector are NVIDIA (NVDA - Free Report) , Salesforce (CRM - Free Report) and Pinterest (PINS - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised 10 cents upward to $23.94 per share in the past 30 days, which suggests year-over-year growth of 84.7%. The long-term estimated earnings growth rate for the stock stands at 30.9%. The NVDA stock has soared 79.3% YTD.
The Zacks Consensus Estimate for Salesforce’s fiscal 2025 earnings has been revised upward by 3 cents to $9.71 per share in the past 60 days, which calls for an increase of 18.1% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 17.4%. CRM shares have increased 4% YTD.
The consensus mark for Pinterest’s 2024 earnings has been revised upward by 9 cents to $1.43 per share over the past seven days, which indicates a 31.2% increase from 2023. It has a long-term earnings growth expectation of 23.4%. The PINS stock has increased 9.1% in the YTD period.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.