JPMorgan Lists 7 Reasons Why Twilio Is A Buy

Twilio Inc TWLO shares are trading higher by 4.8 percent on Friday after the stock received a major vote of confidence from JPMorgan.

Analyst Mark Murphy upgraded the stock to Outperform and laid out seven things about Twilio the market seems to be underappreciating:

• 1. After surging to $70 following its IPO, Twilio’s stock is now trades at only a slight valuation premium to its cloud peers at 4.7x EV/FTM.
• 2. Twilio’s 12 consecutive quarters of at least 70 percent revenue growth is impressive even among other high-growth names.
• 3. Amazon.com, Inc AMZN, which is invested in Twilio, is more of a partner than a competitor.
• 4. Twilio’s massive total addressable market (TAM) of $46 billion is more legitimate than other companies’ TAMs because there is room for multiple providers in the space.
• 5. Twilio is now past the 31 million-share lockup expiation in February, which likely weighed on share price.
• 6. Twilio’s has cut its reliance on higher-risk variable revenue by 60 percent in just two years.
• 7. Twilio’s services are more reliable than those of its competitors.

Related Link: Analyst: Amazon Connect Could Mean Trouble For Twilio

“Based on our customer due diligence, we believe that customers and developers recognize Twilio as a best-in-class toolbox for communications with a multi-year industry lead,” Murphy explains.

JPMorgan has a $36 price target for Twilio, which traded recently at $27.78.