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Twilio Inc. (TWLO) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 mins read

Twilio Inc. (TWLO) closed at $298.18 in the latest trading session, marking a +1.25% move from the prior day. This move lagged the S&P 500's daily gain of 1.74%. Meanwhile, the Dow gained 1.91%, and the Nasdaq, a tech-heavy index, added 1.88%.

Prior to today's trading, shares of the company had gained 30.22% over the past month. This has outpaced the Computer and Technology sector's loss of 1.67% and the S&P 500's loss of 1.86% in that time.

Investors will be hoping for strength from TWLO as it approaches its next earnings release, which is expected to be October 26, 2020. On that day, TWLO is projected to report earnings of -$0.05 per share, which would represent a year-over-year decline of 266.67%. Our most recent consensus estimate is calling for quarterly revenue of $404.97 million, up 37.25% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.08 per share and revenue of $1.60 billion. These totals would mark changes of -50% and +40.86%, respectively, from last year.

Any recent changes to analyst estimates for TWLO should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TWLO is holding a Zacks Rank of #4 (Sell) right now.

Looking at its valuation, TWLO is holding a Forward P/E ratio of 3569.82. Its industry sports an average Forward P/E of 79.84, so we one might conclude that TWLO is trading at a premium comparatively.

Meanwhile, TWLO's PEG ratio is currently 234.01. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 6.26 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 169, putting it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow TWLO in the coming trading sessions, be sure to utilize Zacks.com.


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