5 Twilio Analysts On Q4 Results: 'Recent Operational Focus Has Started To Bear Fruit'

Shares of Twilio Inc TWLO spiked after the company delivered a revenue and earnings beat for its fourth quarter.

KeyBanc Capital Markets on Twilio

Analyst Thomas Blakey maintained an Overweight rating while raising the price target from $77 to $89.

The company’s fourth-quarter beat was driven by “25% growth in Software [now Twilio Data & Applications (TD&A)] compared to total organic growth of 21% in the quarter with gross margin in line and EBIT margin handily beating Street/KBCM estimates driven by restructuring announced in September 2022,” Blakey wrote in a note.

“Twilio guided to $250M-$350M in 2023 operating profit vs. our $111M estimate and the Street at $86M driven by additional restructurings announced earlier this week, in our view,” he added.

RBC Capital Markets on Twilio

Analyst Rishi Jaluria reiterated a Sector Perform rating while raising the price target from $55 to $75.

“Twilio reported underwhelming Q4 top-line results, but profitability guidance well above consensus led shares up 12% after market close,” Jaluria said in a note.

“On one hand, we were encouraged by management's emphasis on driving margin improvement and reaccelerating Data & Applications growth,” the analyst wrote. “On the other hand, we believe Twilio has a long path to a turnaround and may struggle to underwrite the long-term targets given potential further gross margin degradation and execution risk around reaccelerating Data & Apps, which is growing slower than we expected,” he added.

JMP Securities on Twilio

Analyst Patrick Walravens maintained a Market Perform rating and price target of $110.

“The company reported better-than-expected 4Q22 results, with non-GAAP EPS of $0.22 (consensus ($0.08) on revenue of $1,025B, up 22% y/ y (21% organic), down from 33% last quarter (32% organic),” Walravens said.

“DBNR of 110% (JMPe 112%), a big drop from 122% last quarter, reflecting the soft economy and Twilio’s consumption model and non-GAAP gross margin of 50.5% (consensus 50.7%), versus 50.8% last quarter,” he added.

Check out other analyst stock ratings.

Needham on Twilio

Analyst Ryan Koontz reiterated a Buy rating, while raising the price target from $60 to $88.

“Management noted that its mature Communications segment has further weakened on the consumer macro and acknowledged missteps in its emerging Data & Applications business,” Koontz said. “TWLO will now split into two business units and cull a further 17% of staff,” he added.

“Management sees greater efficiency and profitability of its Communications segment as an investment engine for Data & Applications, currently 11% of revs but capable of driving higher and more profitable LT growth,” the analyst further wrote.

Oppenheimer on Twilio

Analyst Ittai Kidron reiterated an Outperform rating and price target of $85.

“Twilio’s recent operational focus has started to bear fruit, with 4Q22 EPS of $0.22 well ahead of expectations,” Kidron said in a note.

“Net, we see the multitude of management actions (incremental cost-cutting, reorganization, management changes, buybacks, lowering SBCE) as a positive response to the upcoming super-voting rights expiration,” the analyst wrote. “However, we believe there are additional actions that can be taken, particularly related to international operations, which can add further upside to the stock,” he added.

TWLO Price Action: Shares of Twilio had risen by 16.49% to $76.93 at the time of publication Thursday.

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