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Twilio Inc. (TWLO) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Twilio Inc. (TWLO) closed at $112.33 in the latest trading session, marking a +1.52% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.26%. Elsewhere, the Dow gained 0.13%, while the tech-heavy Nasdaq added 0.4%.

Coming into today, shares of the company had lost 11.91% in the past month. In that same time, the Computer and Technology sector gained 3.81%, while the S&P 500 gained 3.92%.

TWLO will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.01, down 85.71% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $287.69 million, up 70.33% from the prior-year quarter.

TWLO's full-year Zacks Consensus Estimates are calling for earnings of $0.17 per share and revenue of $1.12 billion. These results would represent year-over-year changes of +54.55% and +71.7%, respectively.

Investors might also notice recent changes to analyst estimates for TWLO. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TWLO is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that TWLO has a Forward P/E ratio of 650.88 right now. This represents a premium compared to its industry's average Forward P/E of 57.05.

It is also worth noting that TWLO currently has a PEG ratio of 39.46. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 2.8 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 96, putting it in the top 38% 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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