Twilio Q3 Earnings Preview: A Deep Value AI Play

San Francisco-based cloud communications company Twilio Inc TWLO will be reporting its third-quarter earnings on Nov. 8 after the market’s close.

While analysts see value in the stock, it’s also now a great AI play with its latest generative AI tools that enable predictions and voice intelligence.

Here's what analysts will be focusing on, and how the stock currently maps against Wall Street estimates.

Business & Fundamentals: Through product development and acquisitions, Twilio has increased both its portfolio diversification and its capacity for growth. Results in the quickly-expanding Communications Platform as a Service (CPaaS) segment are being driven by strong customer retention and outstanding technology.

The company has successfully expanded its profit margins and built a sizable net cash position. Twilio’s balance sheet sports an impressive cash-to-debt ratio, indicative of the company’s efficient cost management. TWLO’s stock valuation remains attractive, trading at a forward P/E of 31.80.

Q3 Analysts' Focus: With organic growth laying the groundwork for growth and capitalizing on the rise of AI, analysts are optimistic about Twilio’s growth potential. The Street is bullish about Twilio’s strategic acquisition of Segment to become an AI play.

Related: Why CRM Innovator Twilio Wants To Spend $3B On Segment

Ratings & Consensus Estimates: The Street expects Twilio to report 35 cents in EPS and $988.23 million in revenue. For the fiscal year ended December 2023, expectations are pegged at a $1.74 in EPS and $4.06 billion in revenue.

Consensus price target on the stock stands at $67.61 representing a 22% upside. The stock is rated a Buy based on the consensus of 35 analysts over the past 90 days.

TWLO Price Action: TWLO stock was trading flat at $55.40 at the time of publication Wednesday, shares are up almost 10% year-to-date.

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