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Twilio’s Exciting Leap: Buy or Pass?

Bryce TuoheyAvatar
Written by Bryce Tuohey
Reviewed by Tim Sykes Fact-checked by Matt Monaco

Twilio Inc.’s stock is experiencing a surge, bolstered by robust market sentiment following the company’s announcement of strong quarterly earnings and a promising new partnership that is set to enhance its competitive position in the industry. On Friday, Twilio Inc.’s stocks have been trading up by 22.07 percent.

Latest Developments

  • Recent upgrades from Mizuho, elevating Twilio’s rating from Neutral to Outperform, set a new price target at $140, accompanied by expected sales stabilization and prospects for accelerated growth.
  • Wells Fargo has included Twilio on its Q1 ‘Tactical Ideas List’, anticipating potential growth acceleration in fiscal 2025, including rebounding partnerships with software vendors.
  • The Twilio board has greenlit a substantial $2B buyback program to reward shareholders, expected to impact 50% of free cash flow through 2027.
  • Twilio projects its Communications/Data Total Addressable Market (TAM) to grow by 11% annually through 2028, alongside achieving significant revenue targets with upwardly revised Q4 guidance.
  • Twilio’s stock sees a recent rise with positive guidance revealed during Investor Day presentations, hinting at improved financial figures for Q4 and beyond.

Candlestick Chart

Live Update At 11:37:21 EST: On Friday, January 24, 2025 Twilio Inc. stock [NYSE: TWLO] is trending up by 22.07%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

A Quick Peek at Twilio’s Numbers

As millionaire penny stock trader and teacher Tim Sykes says, “Be patient, don’t force trades, and let the perfect setups come to you.” This principle is essential in the trading world. It is crucial that traders understand the importance of patience in their strategies. By waiting for the ideal market conditions and setups, rather than rushing into trades that don’t align with their strategies, traders can enhance their chances of success.

As Twilio finds itself in the spotlight, backed by strong upgrades and robust plans for the future, let’s take an engaging journey through its financial maze. The recent unveiling of Twilio’s earnings report calls for a deep dive into its fiscal tapestry. Riding on projected revenue of $1.20B in Q4—well above whisper numbers—Twilio paints an enthralling canvas of growth.

Reviewing the broader canvas, Twilio’s gross margin sits comfortably at 50.9%. Yet, when we peer beneath the numbers, the shadow of negative profit margins—both pretax and total—offer a contrasting narrative, keeping profitability analysts on their toes.

Now, navigating through their cash flow statement, Twilio’s operating cash flow remains strong at $204M. However, its net change in cash, a decrease of roughly $171M, signals some of the trials they face in the financial playground.

Tackling asset dynamics, we notice a total assets figure rising to just over $10B. Their current liabilities, meanwhile, are a manageable fraction of these assets at $701M, backed by reassuring financial strength reflected in the quick and current ratios that soar above the norm.

Flipping the valuation lens, a perusal hints at an evaporated Price-to-Earnings ratio, yet with a Price-to-Free Cash Flow multiple standing at 23, questions about its long-term valuation whirl about.

Articles Highlighting Twilio’s Rise

Mizuho and Wells Fargo’s Vote of Confidence:

The curtains rose on Twilio’s prospects when Mizuho, a name resonating in the financial symphony, decided to play a higher tune for Twilio. This wasn’t just an upgrade; this was a beacon telling investors that times are changing. Setting their new target at $140, they pointed to better revenue visibility underlined by the potential for growth that extends beyond the present.

Wells Fargo, not one to be left behind, added Twilio to a pivotal list earmarked for Q1. This wasn’t just a list; it was a repertoire, bringing Twilio into the fold of companies expected to accelerate their story. With growth predictions showing an upward trajectory, Wells Fargo’s endorsement signaled renewed confidence in Twilio’s long-term narrative.

The $2 Billion Buyback:

Now, let’s journey into Twilio’s strategic play to benefit shareholders. Their $2B buyback wasn’t just an announcement; it was a drumroll, setting up a performance meant to spread cheer. This isn’t merely about returning value; it’s a dance aspiring to allocate half of Twilio’s free cash flow to shareholders. Such moves often herald positivity in the investment landscape, giving investors both monetary delight and faith in the roadmap ahead.

More Breaking News

Investor Day Revelations:

The ambiance of anticipation was thick when Twilio took the stage on Investor Day. Keen eyes were waiting, and the spectacle didn’t disappoint. As Twilio unfolded their fiscal tale, promising an 11% annual TAM growth, the spotlight shone on their strategies tightly knit for the future. This wasn’t just a snapshot; it was a feature-length vision, capturing imaginations in a market where stability often means security.

The Underlying Story

In today’s thoroughfare of financial sagas, Twilio’s narrative stands out, not just as a tale of rebounding potential, but as a collection of measures—some immediate, some for the horizon. The big question lies in the risk-reward calculus. Does one join the symphony, trusting Twilio’s reborn vigor after periods of fiscal introspection? Or wait to see how their strategies unfurl in the real world?

The upgrades, the buyback, the market expansions—these are stories in themselves, but they also act as chapters in a larger novel of ambition and foresight. As millionaire penny stock trader and teacher Tim Sykes says, “Consistency is key in trading; don’t let emotions dictate your trades.” This mantra is crucial for traders analyzing Twilio’s evolving strategies. The outcomes aren’t written in stone, and fruits of these endeavors could be manifold or yet to ripen.

In sum, tracking Twilio’s current arc serves up a dynamic mix of optimism and intrigue. The insights gathered from earnings, coupled with the news, connect the dots towards a promising, if cautiously optimistic, future.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”