Scotiabank has revised its price target for Twilio (TWLO, Financial), lowering it from $160 to $130 while maintaining an Outperform rating on the stock. This adjustment comes as part of the firm's broader reevaluation of price targets across the U.S. software sector due to recent declines in the market.
Despite the revised target, Scotiabank continues to hold a positive outlook for Twilio, suggesting that the company's potential remains strong. The firm advises investors that any tariff-related impacts are anticipated to become evident in the second quarter and the latter half of the year.
Twilio, known for its cloud communications platform, remains a company to watch as market conditions evolve and the sector adjusts to external economic factors.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 27 analysts, the average target price for Twilio Inc (TWLO, Financial) is $132.91 with a high estimate of $185.00 and a low estimate of $75.00. The average target implies an upside of 44.32% from the current price of $92.09. More detailed estimate data can be found on the Twilio Inc (TWLO) Forecast page.
Based on the consensus recommendation from 30 brokerage firms, Twilio Inc's (TWLO, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Twilio Inc (TWLO, Financial) in one year is $95.96, suggesting a upside of 4.2% from the current price of $92.09. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Twilio Inc (TWLO) Summary page.
TWLO Key Business Developments
Release Date: February 13, 2025
- Q4 Revenue: $1.195 billion, 11% year-over-year growth.
- Full Year Revenue: $4.458 billion, 9% organic growth year-over-year.
- Q4 Non-GAAP Income from Operations: $197 million.
- Q4 Free Cash Flow: $93 million.
- Full Year Non-GAAP Income from Operations: $714 million.
- Full Year Free Cash Flow: $657 million.
- Q4 Communications Revenue: $1.121 billion, 12% year-over-year growth.
- Q4 Segment Revenue: $74 million, down 1% year-over-year.
- Q4 Non-GAAP Gross Margin: 52%, down 40 basis points year-over-year.
- Q4 Dollar-Based Net Expansion Rate: 106%.
- Q4 Non-GAAP Operating Margin: 16.5%, up 40 basis points year-over-year.
- Stock-Based Compensation as a Percentage of Revenue: 13%.
- Q1 2025 Revenue Guidance: $1.13 billion to $1.14 billion, 8% to 9% year-over-year growth.
- Full Year 2025 Organic Revenue Growth Guidance: 7% to 8%.
- Q1 2025 Non-GAAP Income from Operations Guidance: $180 million to $190 million.
- Full Year 2025 Free Cash Flow Guidance: $825 million to $850 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Twilio Inc (TWLO, Financial) achieved a record revenue of $1.195 billion in Q4 2024, marking an 11% year-over-year growth and the second consecutive quarter of double-digit growth.
- The company reported its first-ever quarter of GAAP operating profitability, ahead of its initial target.
- Twilio Inc (TWLO) increased its annual free cash flow by nearly $1 billion since 2022, demonstrating strong financial discipline.
- The company launched 251 products, enhancements, and services in 2024, aligning with its strategy to build a trusted, simple, and smart platform.
- Twilio Inc (TWLO) has a strong presence in the AI sector, with 90% of the Forbes 50 AI start-ups building on its platform, showcasing its essential role in customer engagement.
Negative Points
- Segment revenue for Q4 was down 1% year-over-year, indicating challenges in this business unit.
- The company incurred $17 million in bad debt expenses related to a Brazilian telecom customer, impacting operating margins by 140 basis points.
- Non-GAAP gross margin for the Communications business unit declined by 110 basis points quarter-over-quarter due to higher hosting costs and increased messaging revenue mix.
- Twilio Inc (TWLO) faces challenges in the RCS market, with interoperability issues and limited use cases affecting its growth potential.
- The company's guidance for 2025 indicates a cautious approach, with expected revenue growth of 7% to 8%, reflecting the uncertainties in its usage-based revenue model.
