Why Stifel Is Bullish On Twilio: 'Clear Leadership, Category-Defining Position'

Twilio Inc TWLO owns the most comprehensive communications API platform and a community of over 10 million developers, which has positioned the company as a market leader, according to Stifel.

The Twilio Analyst: J. Parker Lane initiated coverage of Twilio with a Buy rating and $425 price target. 

The Twilio Thesis: The company should be able to sustain more than 30% growth in the longer term, given that it is a leader in a big and fast-growing market, Lane said in the initiation note.

“We believe Twilio commands a premium multiple in the software space given its clear leadership and category defining position in its core market, its ability to grow >30% organically in the mid-term, and the potential for Segment to drive further adoption of the platform,” the analyst said.

Organizations are more focused on customer experience than ever before to differentiate their offerings, which has boosted investments in software, in Stifel's view.

"We believe Twilio is well-positioned to capitalize on the transformation of these experiences and capture share."

TWLO Price Action: Shares of Twilio were up 2.27% at $377.52 at last check Thursday.