Twilio Earnings: Growth Accelerating and Retention Improving

No-moat Twilio continued its impressive run, ending 2024 with solid results featuring upside to our revenue estimate and profitability slightly ahead. We view the outlook as in line with the investor day framework prescribed in January. As such, we have more confidence in moving our DCF to more closely align with this framework, which drives our fair value estimate meaningfully higher to $120 per share, from $76. We haven't moved our revenue forecast to the 10%-plus area, as we think margins are more manageable than the demand environment. We assume shares selling off in the after-market hours is due to a lack of even a slight guidance boost after a very aggressive move in the stock recently. Given the meaningful improvements baked into investor expectations within the stock price, our Morningstar Uncertainty Rating is High, and we would wait for a better entry point.