Twilio Analysts Boost Price Targets Following Q3 Report: 'Attractive Growth Story'

Multiple Twilio analysts issued price target increases Tuesday after the cloud company highlighted revenue growth, customer wins and a large addressable market in its third-quarter report. 

Twilio Analysts On Revenue: Twilio Inc TWLO reported third-quarter revenue that was up 52% year-over-year, surpassing the 46% growth seen in the second quarter.

BofA Securities analyst Nikolay Beliov said Twilio could notch revenue growth of 30% or more in each of the next four years, implying $5 billion by 2024.

“We believe this target is realistic and achievable,” the analyst said.

Beliov raised the price target for Twilio from $335 to $370 and reiterated a Buy rating.

Piper Sandler analyst Brent Bracelin raised the Twilio price target from $315 to $365.

“We remain buyers of TWLO based on the potential for revenue to expand to $6B to $10B within five years as the customer engagement platform of choice,” the Overweight-rated analyst said.

Related Link: Tony Zhang’s Twilio Options Trade

Twilio Analysts On Cloud Customers: Bracelin said key Twilio customers like Nike, Lululemon, Walmart and Netflix are benefiting from Twilio for their direct-to-consumer initiatives.

The top 10 customers represent 14% of Twilio’s sales, the analyst said. Revenue from these customers increased 63% year-over-year.

“The top 10 customers on average are now spending $25M annually, hinting at the scope of the opportunity longer-term to empower new DTC engagements for large enterprise brands,” he said. 

Needham analyst Richard Valera, who maintains a Buy rating on Twilio, said the company is “benefiting from an acceleration of digital transformation plans by many of its customers.”

Twilio noted an expanded partnership with a Fortune 50 bank and new Flex deals with Robinhood and Prometric, the analyst said. 

Analysts On Twilio’s Market: BofA's Beliov said $5 billion in revenue is only 5% market share in a $100-billion market.

Twilio’s business is “diversified across all verticals and customer sizes,” the analyst said. 

Twilio’s voice segment is only 17% of revenue, and the messaging business is rapidly accelerating, he said. 

Mizuho analyst Siti Panigrahi said Twilio "is a durable growth story in software, benefiting from several secular tailwinds."

Panigrahi raised the price target on shares from $350 to $370.

“Twilio remains an attractive growth story in our view,” he said. 

KeyBanc Capital Markets analyst Alex Kurtz rates shares of Twilio with an Overweight and raised the price target from $330 to $350. 

“It has emerged as the pioneer and leader in cloud software API’s for the communications sector,” the analyst said of the company. 

Twilio is poised for “industry-leading revenue growth,” he said.  

TWLO Price Action: Shares of Twilio were down 1.8% at $295.22 at last check Tuesday. 

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