Analysts On Twilio Investor Day: 'More Confidence In Owning TWLO For The Next Decade'

Twilio Inc TWLO shares hit new 52-week highs on Friday after jumping more than 13% in response to a guidance hike during Thursday’s investor day event.

In August, Twilio guided for third-quarter revenue of between $401 million and $406 million, but the company said it now expects to exceed that range. Analysts were estimating third-quarter revenue of just $407.9 million.

Twilio management said it now anticipates at least 30% annual organic revenue growth over the next four years.

Several Wall Street analysts have weighed in on Twilio following the guidance update.

Digital Transformation Winner: KeyBanc analyst Alex Kurtz said Twilio is one of KeyBanc’s top digital acceleration stock picks.

“Twilio outlined a highly diversified business during its financial analyst day with a growing mix of products that will add to longer-term GM upside,” Kurtz wrote in a note.

Morgan Stanley analyst Meta Marshall said COVID-19 has made Communications Platform as a Service (CPaaS) a necessity in today’s economy.

“We think a growing need for digital customer engagement & for businesses to understand how to optimize those channels will fuel TWLO's continued innovation, allowing it to maintain market leadership & helping it achieve outlined 30%+ growth targets,” Marshall wrote.

Needham analyst Richard Valera said Twilio is one of the best-positioned stocks to take advantage of the coronavirus-accelerated digital transformation of the economy.

“We are nudging up our 3Q/4Q20 estimates, and materially increasing our 2021 estimates, though we remain modestly below the company's 30%+ revenue growth target (at +28%),” Valera wrote.

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Long-Term Growth Runway: Piper Sandler analyst Brent Bracelin said demand for digital engagement continues to rise, even as pandemic lockdowns ease.

“The plethora of new disclosures unveiled at the 2020 analyst day coupled with the 30%- plus growth outlook at billion-dollar-plus scale over the next four years gives us more confidence in owning TWLO for the next decade, particularly given its leadership position in the $87B digital cloud engagement TAM,” Bracelin wrote.

Rosenblatt Securities analyst Ryan Koontz said Twilio investors got an impressive set of business achievements, new products and financial targets.

“Even considering the company's modest progress in penetrating the CCaaS market and G2K customer segment, we see plenty of opportunity runway,” Koontz wrote.

Ratings And Price Targets:

• KeyBanc has an Overweight rating and $330 target.
• Morgan Stanley has an Overweight rating and $270 target.
• Needham has a Buy rating and $320 target.
• Piper Sandler has an Overweight rating and $315 target.
• Rosenblatt has a Neutral rating.