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Twilio Inc Class A TWLO

Morningstar Rating
$56.52 +0.27 (0.48%)
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Company Report

Twilio Earnings: A Strong Close to the Year as Communications Unit Buoys Results

Narrow-moat Twilio reported strong fourth-quarter results with both revenue and profitability handily exceeding our expectations. Guidance for the first quarter is just below our revenue expectations, but easily surpasses our profitability expectations. We think the market is overreacting to the disappointing revenue guidance and not fully appreciating near-term profitability hindering measures taken now in order to lower overall stock-based compensation over the long term. When considering prudent operating decisions that should increase future profit margins, the continued momentum of its communications unit, and the time value of money, we raise our fair value estimate to $73 per share from $64 and view shares as fairly valued.

Price vs Fair Value

TWLO is trading at a 23% discount.
Price
$56.25
Fair Value
$85.00
Uncertainty
Very High
1-Star Price
$984.53
5-Star Price
$24.90
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Twilio is the clear leader in a rapidly growing industry for CPaaS. It has earned this lead through superior technology and unique targeted selling to software developers that involves easy implementation and rapid deployment.

Bears

We expect Twilio’s margins to be structurally lower than software peers because of network carrier access fees. Despite substantial scale, Twilio remains unprofitable on a GAAP basis and loosely breakeven on a non-GAAP basis.

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News

Trading Information

Previous Close Price
$56.25
Day Range
$56.0757.58
52-Week Range
$45.0278.16
Bid/Ask
$56.48 / $56.50
Market Cap
$10.23 Bil
Volume/Avg
5.0 Mil / 3.3 Mil

Key Statistics

Price/Earnings (Normalized)
39.94
Price/Sales
3.19
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
6.54%

Company Profile

Twilio is a cloud-based communications platform-as-a-service company offering communication building blocks that allow for a fully customized customer engagement experience spanning voice, video, chat, and SMS messaging. It does this through various application programming interfaces and prebuilt solution applications aimed at improving customer engagement. The company leverages its Super Network, a global network of carrier relationships, to facilitate high-speed, cost-effective communication.
Sector
Communication Services
Industry
Internet Content & Information
Stock Style Box
Mid Growth
Total Number of Employees
8,156

Competitors

Valuation

Metric
TWLO
RNG
ZM
Price/Earnings (Normalized)
39.9410.9312.80
Price/Book Value
1.342.63
Price/Sales
3.191.444.35
Price/Cash Flow
20.535.3311.09
Price/Earnings
TWLO
RNG
ZM

Financial Strength

Metric
TWLO
RNG
ZM
Quick Ratio
6.081.294.01
Current Ratio
6.531.744.27
Interest Coverage
−18.03
Quick Ratio
TWLO
RNG
ZM

Profitability

Metric
TWLO
RNG
ZM
Return on Assets (Normalized)
−1.20%13.58%17.91%
Return on Equity (Normalized)
−1.44%23.26%
Return on Invested Capital (Normalized)
−1.28%21.34%22.94%
Return on Assets
TWLO
RNG
ZM
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