TThe curse of mixed leadership strikes again. Twilio actions (TWLO) took a heavy blow in Thursday’s trading after the company’s fourth-quarter outlook for Communication Platforms as a Service (CPaaS) failed to impress. The weak focus shone a solid third quarter in which the company posted beats on both the top and bottom of the line.
In 3Q21, Twilio generated revenue of $ 740.2 million, a 65.2% year-over-year increase and beating estimates of $ 56.1 million. Non-GAAP EPS of $ 0.01 exceeded Street’s forecast by $ 0.15.
Looking ahead to the fourth quarter, Twilio’s forecast for revenue of between $ 760 million and $ 770 million is actually higher than the consensus estimate of $ 748 million. However, the company expects to post a larger loss than analysts’ forecast; Twilio guided non-GAAP EPS in the range ($ 0.26 – $ 0.23), worse than the street call ($ 0.10).
In addition, the company announced the departure of COO George Hu with immediate effect. While Mr. Hu helped steer the company to around $ 3 billion in revenue, up from just $ 300 million since joining shortly after the 2016 IPO, the Colliers analyst , Catharine Trebnick, believes that the company will lose a “critical asset”.
Nonetheless, Trebnick remains on board and points out that the company’s new marketing assistance automation platform, Engage, holds great promise.
âDespite the mixed outlook, we remain buyers of TWLO,â the analyst said. “We believe that Engage generates a broader market opportunity for the company as it benefits B2C clients by providing a platform capable of unifying disparate communication / data analytics silos to drive more marketing campaigns. effective. “
Trebnick rates TWLO shares a purchase with a target price of $ 375. At current levels, this target suggests an increase of around 29% for the coming year. (To see Trebnick’s review, Click here)
Ryan Koontz of Needham offers a similar assessment, calling Hu’s departure a surprise that “raises concerns.” The analyst also believes investors might be worried about a slowdown in organic growth, which fell from 47% to 54% to 42% year-on-year in the past 4 quarters.
That said, Koontz applauds the âexcellent resultsâ and, like Trebnick, remains in the bull camp.
âDespite the stock’s downturn,â said the analyst, âWe consider TWLO’s market leadership to be sustainable given the company’s highly differentiated go-to-market (GTM), led by developers.
Needham analyst rates TWLO a buy with a target price of $ 400. This figure implies a 37% increase from current levels. (To look at Koontz’s palmares, Click here)
Twilio also retains the support of most of the Street analysts. Of the 18 registered opinions, 16 are to buy while only 2 say to keep, all resulting in a strong consensual purchase rating. After Thursday’s drop, the average price target of $ 437.67 implies stocks will rise 46% over the next few months. (See the analysis of Twilio shares on TipRanks)
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