4 Analysts On Twilio's Year-End Report: 'Digital Darling'

Shares of Twilio TWLO were gaining ground Thursday after the San Francisco-based cloud communications platform reported higher-than-expected revenue and earnings for the fourth quarter and full year 2020.

Twilio's Numbers: Twilio posted $548.1 million in fourth-quarter revenue, up 65% year-over-year, with the company attributing $23 million from Segment starting on Nov. 2, 2020, the date that it completed the acquisition of the customer data platform.

Political traffic also contributed $22.7 million to fourth-quarter revenue.

For the full year 2020, Twilio reported $1.76 billion in revenue, a 55% year-over-year spike. The company ended 2020 with more than 221,000 active customer accounts versus 179,000 one year earlier.

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Twilio Analysts React: Piper Sandler analyst Brent Bracelin dubbed Twilio a "digital darling" and expressed enthusiasm over the latest numbers.

"Accelerating growth reinforces our bullish view on the 3-5 year growth prospects and confidence in the Segment combination as having ‘game-changing' potential," the analyst said.

Needham analyst Richard Valera said Twilio showed "broad-based strength, especially in COVID-bolstered verticals, such as telehealth, e-commerce and education."

He also realigned his projections for Twilio's 2021 performance.

"Net, it appears Twilio is benefiting from an acceleration of digital transformation plans by both new and existing customers, driving increased demand for TWLO's broadening digital communications platform," he said.

Alex Kurtz, managing director at KeyBanc Capital Markets, credited much of Twilio's performance to opportunities related to the COVID-19 pandemic, "including new Flex (the Company's new CCaaS platform) wins, new vertical-specific use cases in Healthcare and Education, and expanded CoD opportunities like Instacart."

He also predicted a solid 2021 for the company.

"We see Twilio as a premium growth asset with solid visibility to 30%+ growth over the next several years as a key enabler of digital acceleration with strong revenue retention rates of 139%."

Rosenblatt analyst Ryan Koontz said Twilio "has established itself, alone, as the global leading supplier of CPaaS with the most advanced products and channels in its segment."

He also voiced bullish support for the company's 2021 prospects.

"We increase our 1Q21, FY21, FY22 revenue estimates (by +3%, +4%, +4%) and expect consensus numbers to increase as well," he wrote. "At its Q4 investor day, TWLO announced that it expects to sustain 30% y/y organic growth for the next 4 years - which we view as achievable with CPaaS remaining at the forefront of a global shift to digitalization."

TWLO Ratings, Price Targets: Piper Sandler maintained an Overweight rating on Twilio and raised the price target from $475 to $550.

Needham maintained a Buy rating and raised the price target from $340 to $500.

KeyBanc maintained an Overweight rating and raised the price target from $420 to $550.

Rosenblatt maintained a Buy rating and raised the price target from $450 to $550.

TWLO Price Action: Twilio shares were up 8.14% at $445.55 at last check Thursday.