|Bid||147.12 x 800|
|Ask||147.50 x 800|
|Day's Range||140.71 - 147.10|
|52 Week Range||53.17 - 148.80|
|Beta (3Y Monthly)||1.32|
|PE Ratio (TTM)||N/A|
|Earnings Date||Aug 5, 2019 - Aug 9, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||146.59|
shares were rising Tuesday after Needham analyst Richard Valera initiated coverage of the San Francisco cloud-communications-platform provider with a buy rating. The firm set a price target of $165 on the stock, a 17% upside from its Monday closing price of $140.71, as Valera views Twilio as the leader in the communications-platform-as-a-service space. Valera said Twilio has generated an "exceptional" organic growth rate of more than 60% with no signs of slowing due to its ability to integrate into different types of digital communications within apps like Uber and Airbnb.
Twilio (NYSE:TWLO) stock is one of those names that draws a big "ugh!" from me when I look back over the long-term charts. Simply put, I had TWLO stock on the radar and let it fade away. Shares went from $30 to $90 in just a few months last year and that train has kept on moving.Some investors were wise enough to load up in the $20s, $30s and $40s after the post-IPO surge cooled down. I say wise because $90 was only a temporary top, with TWLO stock now another 50 points north of that.It brings up the all-too easy (and too familiar) question of, have investors missed their chance in Twilio stock?InvestorPlace - Stock Market News, Stock Advice & Trading Tips Evaluating Twilio StockThe short answer is no. But the higher we bid the stock, the more risk we take as future returns are diminished. No one wants more risk and less reward, right? That line of thinking is traditional and makes sense in most circumstances.For me, I don't mind paying up a premium for a stock that's proven itself. I'd rather pay a premium for TWLO stock at $50 as it was surging higher and had momentum in its business, than buy at $30 two years ago when it had uncertainty surrounding it. * 7 Stocks to Buy for the Coming Recession Twilio stock running from $50 to $100, then $100 to $150 is big, but realistic. However, buying today -- at $140 a share -- we can't expect TWLO to run to $280, then $420 so fast. So what now? Valuing TWLO StockThere's no other way to put it: Twilio stock is not cheap. But there are plenty of stocks that weren't cheap that went on to have stellar moves and make long-time investors wealthy. Three that come to mind are Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Salesforce (NYSE:CRM).I'm not saying TWLO is necessarily the next one of those (these stocks might be), but with an almost-$19 billion market cap, there's still room for upside. For a company that's forecast to do $1.1 billion in sales this year, many investors will gag at the 16.3 times current revenue figure.Like I said, this name isn't cheap!But TWLO stock is turning profitable and while cash flows are not yet where I'd like to see them, the long-term trajectory is big for this company. Twilio's description reads, "Twilio Inc. provides a cloud communications platform that enables developers to build, scale, and operate communications within software applications."In other words, this cloud-based platform is a key cog in many companies' customer communications strategy. That includes Uber (NYSE:UBER), Lyft (NASDAQ:LYFT), Airbnb and Salesforce. Have you seen the growth rate for these companies and then considered what that means for TWLO?It's not just them, either. Coca-Cola Enterprises, Twitter (NYSE:TWTR), Nordstrom (NYSE:JWN), VMWare (NYSE:VMW), the American Red Cross, Yelp (NYSE:YELP), Twitch, Lululemon Athletica (NASDAQ:LULU) and more are all TWLO customers.Analysts predict 70% revenue growth this year, but "just" 34% growth to $1.48 billion next year. That's still solid growth, but the declining rate of growth could be something that stalls the stock at this valuation. Let's look at the charts to get a better idea of what's going on. Trading TWLO Click to EnlargeWhile the slowing revenue growth rate in 2020 is a concern of mine, keep in mind Twilio's still in fiscal Q2 of 2019. More immediately though, Twilio stock just offered 7 million shares at $124 in a secondary offering. So far, the stock has done an incredible job of absorbing this excess supply, along with the shaking off the market selloff in May. * 7 Dark Horse Stocks Winning the Race in 2019 That said, there have been some cracks showing. Through Q1, the 20-day moving average was support. In Q2 that support faded and the 50-day moving average had to buoy TWLO stock. And while almost everything was under pressure by the end of May, this mark had technically given way for Twilio.All this is to say that I don't know how much we can count on the moving averages should we get a pullback. Twilio stock has been riding a multi-month channel filled with higher highs and higher lows. We should consider channel support to be support until proven otherwise.If it fails though, we could get the correction that sidelined bulls have been hoping for. We nailed the breakout over $100 in January and in March said Twilio stock is a buy on essentially any type of pullback. While those have paid off, we need to use more discipline now.Recently, dips below $125 have been gobbled up, while aggressive bulls will be buying on tests of the 50-day and channel support. Below that we have the 38.2% retracement at $112.27 and the 50% retracement near $101. In between is the 200-day moving average. I would love a dip to this area to consider a long position in Twilio stock.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Kenwell is long AMZN. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Quality Cheap Stocks to Buy With $10 * 7 U.S. Stocks to Buy With Limited Trade War Exposure * 6 Growth Stocks That Could Be the Next Big Thing Compare Brokers The post For Investors Who Missed Their Chance, Hereas Where to Buy Twilio Stock appeared first on InvestorPlace.
"The Cloud" has evolved from a budding innovation in tech into one of the largest factors driving growth in the technology sector in only a few years. Check out these three cloud stocks to consider right now.
Always present, rarely seen, and increasingly essential, the fast-growing tech company is slowly emerging as a cloud titan in its own right.
Twilio (TWLO), the leading cloud communications platform, today announced that Mindy Kaling will join the company as a keynote speaker and Macklemore will perform at SIGNAL, its annual customer and developer conference on Aug. 6 and 7, 2019. Now in its fifth year, SIGNAL will be held for the first time at The George R. Moscone Convention Center West in San Francisco.
The Latest on Amazon, Microsoft, Twilio, and More(Continued from Prior Part)Twilio has seen tremendous growth in recent quartersCloud communication company Twilio (TWLO) continues to surge. The stock made another all-time high on June 7 when it
Since coming public in June 2016, Twilio (NASDAQ:TWLO) shares have been a rocket ship for investors. Shares that first traded at $24 three years ago are worth $144.11 as of the close on June 7, a gain of 500%. They're up 860% from the initial IPO price.Source: Web Summit Via FlickrCredit goes to rapid growth for the Web-based communications company, with revenue now rising at 30% every quarter. For the March quarter the company pulled in $233 million, against $650 million for all of 2018.Note that we haven't mentioned profits. There still aren't any. Losses are continuing to increase, as research and selling expenses swallow gross profits that are still more than half of revenue. Thus, the company has launched a $750 million share offering, and allowed underwriters to buy an additional $112.5 million of stock at $133.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut the question in cases like this is always, can management land the rocket ship? The Bull Case for TWLO StockThe bull case starts with CEO and co-founder Jeff Lawson, who also co-founded Stubhub and was one of the original product managers at Amazon (NASDAQ:AMZN) Web services.Lawson has been profiled as "the wizard of apps," because Twilio's APIs let companies add fully automated text and voice services to their apps. Twilio software is now used by customers ranging from Coca-Cola (NYSE:KO) to Facebook (NASDAQ:FB). * 7 Stocks to Buy As They Hit 52-Week Lows Investors are betting that Lawson can beat the "bad actors," tracking use of the platform to keep out spammers and robocallers, using machine learning to spot efforts at phishing and abuse. This, and automating protection under Europe's General Data Privacy Regulation (GDPR), helps keep Twilio from becoming a commodity product. Bulls are also betting Lawson can keep spotting good acquisitions like Sendgrid, an e-mail platform purchased last year for $2 billion.Bulls can also point to institutional confidence in Twilio. Institutions now own more than 50% of the common. These investors can usually distinguish between short-term success and sustainability. The Bear Case for TwilioThe bear case starts with the fact that voice, text and e-mail are commodity services, and that this market is shrinking as data calls replace voice calls.Speculators are already seeking options protection for their long positions, concerned that growth has to slow as the market is absorbed.Our James Brumley is among those who insist the company's growth can't be sustained. He writes both start-ups and giant companies like Cisco Systems (NASDAQ:CSCO) can incorporate Twilio's concepts in their apps, and that scale isn't yet leading to profit.This is what I mean about landing the rocket ship. Many companies grow quickly only to falter when it comes time to turn revenue into profit. Securing apps is becoming an increasingly vicious game. The Android operating system of Alphabet's (NASDAQ:GOOG, NASDAQ:GOOGL) Google unit was recently infested with adware that can wreck phones, through what had been a reputable app provider.But competing with bad guys is competing. If Twilio can continue to secure its services, real profit becomes possible. The Bottom LineInvestors who have ridden the Twilio rocket ship to this point are right to try to lock in their profits and seek protection, if only because large numbers are harder to grow than smaller ones. With a market cap approaching $20 billion on trailing year sales of $650 million, Twilio is more than fully valued.But I wouldn't hit the panic button just because antitrust officials are going after the Cloud Czars upon whose success apps like Twilio depends. Get your money out, seek protection but know that a hard fall may become a buying opportunity.Dana Blankenhorn is a financial and technology journalist. He is the author of a new environmental story, Bridget O'Flynn and the Bear, available now at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy As They Hit 52-Week Lows * 4 Antitrust Tech Stocks to Keep an Eye On * 5 Gold and Silver Stocks Touching Intraday Highs Compare Brokers The post Twilio Needs to Figure Out How to Land the Rocket Ship appeared first on InvestorPlace.
I often talk about "vision premiums," or elevated valuations that are given to hot stocks. At this time, arguably no equity defines that premium better than Twilio (NYSE:TWLO) stock.Source: Web Summit Via FlickrBolstered by the leadership status of TWLO's communication platform-as-a-service (CPaaS), Twilio stock has climbed to elevated valuations amid the company's massive growth. However, the expensiveness of both the company's service and Twilio stock could drive its customers and investors to alternative options. * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% Investors Continue to Ignore the Sky-High Multiple on Twilio StockFirst, I will point out that a stock can stay "expensive" from a price-earnings (PE) ratio standpoint for a long time. This is especially true when a firm seen as the company of the future launches new technologies or lines of business. Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), and many cannabis stocks have proven that point over the last few years.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, once a stock has reached such levels, buying it becomes a bet that somebody will willingly pay more in the future. The higher the multiple, the less likely one is to find such a buyer.Expensive stocks sometimes keep moving higher. That pattern could play out with Twilio stock, which has risen by about 575% since December 2017. However, given Twilio stock's forward PE ratio of over 490, that is not a bet I endorse. Profit Deceleration, Competition Could Weigh on the Valuation of Twilio StockTWLO's profit growth, while impressive in a general sense, appears meager when compared to the multiple of TWLO stock. Headwinds will limit its profit growth to an estimated 9.1% this year. Things should improve next year, as its earnings will jump 141.7%, according to the consensus estimate. Still, that level of growth should also prove to be temporary, as analysts foresee average annual growth of 33.2% per year for the subsequent five years.Moreover, Twilio stock no longer remains the only CPaaS name that investors can buy. Bandwidth Inc. (NASDAQ:BAND) launched its IPO last year. It trades at only 8.2 times its sales, compared to more than 25 times sales for TWLO.Investors can also choose a much safer CPaaS stock. As InvestorPlace columnist James Brumley pointed out, Cisco (NASDAQ:CSCO) has begun to compete in this business. CSCO's $34.64 billion cash hoard will allow it to easily outspend Twilio. CSCO's profit is growing at a double-digit percentage rate, and CSCO stock has a forward PE, based on the consensus EPS outlook, of only 16.5. Twilio's Services Are Also Perceived as PriceyMoreover, the prices that Twilio charges for its services have become too expensive for some.Unfortunately for the company, the CPaaS industry has a low barrier to entry, and lesser-known peers have hurt TWLO in the past. Investors hammered Twilio stock in 2017 when Uber (NYSE:UBER) moved to reduce its dependence on the company.Given the strong growth of CPaaS,I do not think increased competition will lead to an overall reduction in Twilio's customer base or revenues. However, new entrants -- particularly an established, profitable entrant such as Cisco -- could slow Twilio's growth and will likely create pricing pressure. The Bottom Line on Twilio StockAlthough Twilio stock can deliver much of the massive growth it promises, investors and customers who find Twilio too expensive can turn to lower-cost options. TWLO stock has benefited from the company's leading position in the CPaaS industry. It may even exceed analysts' consensus revenue growth projection of 70% for the current fiscal year.However, with Twilio stock trading at over 490 times its earnings, this cloud company has moved into the stratosphere. Also, large customers have shown a willingness to abandon the platform. The company faces competition from upstarts such as Bandwidth and well-funded, established tech companies such as Cisco. Even in a world where PE ratios don't matter much, TWLO stock is more likely a sell than a buy under these conditions.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% * 7 Stocks to Buy That Don't Care About Tariffs * 5 Healthcare Stocks to Pick Up From the Wreckage Compare Brokers The post Twilio Stock Could Be Hurt by Increased Competition appeared first on InvestorPlace.
The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as […]
The Popchips founder is donating a 1 percent equity stake in his latest food venture to No Kid Hungry.
Twilio (NYSE:TWLO) has delivered breathtaking returns over the past year. At the start of 2018, Twilio stock sold for just $25. It's managed to more than quintuple since then, with TWLO stock jumping 6.53% yesterday.But the good times could come to an end in a hurry. Twilio faces multiple headwinds that will stop the stock's meteoric run. For one, TWLO stock could get caught in the government's big tech antitrust crackdown. Second, its core business is unlikely to keep growing nearly as much in future years. And finally, after such a huge move, the valuation of the shares is rather aggressive.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Antitrust Concerns to Hit Tech StocksOver the weekend, news came out that the government is running an antitrust probe against Alphabet (NASDAQ:GOOGL). On Monday, this quickly spread to Facebook (NASDAQ:FB) and other tech giants. Not surprisingly, the FANG stocks got routed on Monday before recovering somewhat with Tuesday's euphoric market recovery.Still, there's a great deal of concern about what will happen with big tech now that the government is investigating. It's particularly worrisome for the sector since there appears to be bipartisan support for cracking down on the largest tech firms. * 7 Bank Stocks to Leave in the Vault You may be asking, what does that have to do with Twilio stock? It matters because SaaS stocks could see their valuations get crushed. Generally, SaaS companies are run with one of two strategies in mind. The first is to become the dominant force in a particular application and then raise prices as competition fades. Salesforce (NYSE:CRM) is a classic example. The company still generates little in the way of accounting profits, but absolutely dominates its business. CRM stock is up 3,500% since its IPO. However, if they try to exploit their dominant market position, the government may start scrutinizing them as well.The second strategy for SaaS companies is to sell to a bigger player. However, once your business gets large enough, there is only a limited pool of firms with the resources to make acquisitions. And now many of those firms will be in the penalty box, as they try to stay under the radar to avoid the government scrutiny bringing anti-monopoly charges against them. A basket of SaaS stocks fell more than 5% on Monday, and rightfully so. Valuation multiples for the sector -- including Twilio stock -- will sink if the government's antitrust efforts have any teeth. Stagnant MarketsA key problem for Twilio is that its core business isn't a particularly attractive one. Prior to the Sendgrid acquisition, 90% of revenues came from traditional phone services. The company primarily makes its money selling programmable text and voice assistance to marketers. The problem with that as a core operation should be apparent.People are using their phones less and less for voice. Folks are overwhelmed with robocalls and as a result the value of voice marketing has stagnated and may be starting to decline. Similarly, text messages aren't nearly as hot an area as they were a few years ago. Data usage is exploding, and in doing so, is replacing many functions that used to be handled by voice or text.These businesses certainly won't disappear overnight, but they're not the sort of wide runway growth fields that we traditionally associate with stocks in this sector.The $2 billion Sendgrid acquisition earlier this year helps matters to some extent as it significantly diversifies the business. Unfortunately, its primary business, facilitating e-mail marketing, is quite mature as well. Email marketing will probably have better longevity than voice and text, but it's not going to be a high growth field forever either. Crazy ValuationThe massive rise in Twilio stock has far outpaced the business' fundamentals. Once Twilio stock dropped after its IPO, it settled into a trading range around 7-8x sales. That's a reasonable multiple for a SaaS company, particularly one whose business has less upside than the field as a whole. 10x sales would be a more optimistic but still defensible valuation for the business. * 6 Big Dividend Stocks to Buy as Yields Plunge Twilio stock is now selling at an insane 24.1x sales, however. Yes, I know the company has a huge year-over-year posted revenue growth rate of 70%. But acquisitions helped boost that. Analysts see revenue growth dropping to 34% next year and then 26% the year after.That's simply not fast enough growth to justify the insane sales price multiple. You can buy something like Alteryx (NYSE:AYX), which is in the sexier field of data science, prediction, and analytics at 19.4x sales. And Alteryx consistently runs something like 50% annual revenues growth while being slightly more profitable than Twilio. It's highly unlikely that Twilio stock will be able to maintain a higher P/S ratio than other SaaS companies which are growing more quickly. TWLO Stock VerdictMy InvestorPlace colleague James Brumley recently published a thoughtful article about the risks at Twilio. I agree with his assessment, in particular, he highlights that the company continues to lose money on a GAAP basis despite the rapid growth rate. Additionally, cash flow has turned negative again after a brief period above zero.As Brumley notes, at some point Twilio needs to start generating real and consistent profits and cash flow for shareholders or the valuation will shrivel up. Particularly as competition is heating up in some of Twilio's business segments, Twilio needs to figure out some way to boost profit margins. Now with the government cracking down on big tech, this could be the catalyst that causes TWLO stock's massive rally to fall apart.At the time of this writing, Ian Bezek owned FB stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 6 Retailers Including Disney Agree to Ditch On-Call Scheduling * The 10 Best Stocks for 2019 -- So Far * 7 Small-Cap ETFs to Buy Now Compare Brokers The post 3 Reasons Why You Should Sell Twilio Stock Now appeared first on InvestorPlace.
Microsoft, Lululemon, CSX, Twilio and TransDigm are large-cap leaders that have rebounded from recent slides to regain their 50-day moving averages.
If you were to only look at shares of Shopify (NASDAQ:SHOP), you probably wouldn't know anything is wrong. For instance, the escalating trade war with China and now Mexico would not be a worry. Given how well Shopify stock has done over the past month, many observers might also overlook the fact that the S&P 500 has been down for four straight weeks.Source: Shopify via FlickrThere's no other way to put it: Shopify stock has been an unstoppable beast. Shares are still consolidating near the recent highs after more than doubling from its December lows and is up more than 130% in just over five months.At some point though, SHOP has to get off the rocket ship. That's just the way it is. Timing that departure is a lot harder than it seems though, given that it can happen very quickly and in a very painful fashion. Just see Nvidia (NASDAQ:NVDA) for proof.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat brings up the question of, should investors buy Shopify stock at $250? * 6 Big Dividend Stocks to Buy as Yields Plunge Trading Shopify Stock Click to EnlargeSHOP stock price is backing off the $290 highs it was pushing last week. The fact that the stock can continue pushing new highs in this environment is incredible.I loved this name on its $155 breakout and subsequent retest where it held the 10-week moving average (purple arrow). But I didn't expect another $100+ to come so quickly.There's a lot of doubt surrounding this name thanks to its high valuation. Many argue, as they do for The Trade Desk (NASDAQ:TTD), Roku (NASDAQ:ROKU), Twilio (NYSE:TWLO) and other high-growth stocks, that Shopify stock is overvalued. They say the stock price can't support the business and that it's destined for collapse.The only problem with that theory? These shares double, triple, quadruple and more, all while these worries persist. Not being able to value it by traditional metrics makes it difficult to price a name like Shopify, but not impossible. Further, these stocks tend to get hammered during market-wide corrections.SHOP stock stood up stronger than its high-growth peers but still came in about 30% from the Q4 highs. A similar correction would bring us to $200 a share should we get similar summer volatility. That would likely be a solid buying opportunity, although many investors would still balk at that price.Unless the market really starts to implode though, it could be a while before we see SHOP stock this cheap. How about $250 then? Shares are down over 3% to start the week, down to $265. Another few days like that and $250 could be right around the corner. That would bring Shopify down to the 10-week moving average. This moving average has been guiding shares higher for all of 2019.This level needs to give way before any further downside is seen. Bottom Line on Shopify StockAggressive bulls will likely gravitate to SHOP stock at $250. This would represent a 12.5% decline from the highs. That said, if the market is turbulent enough, Shopify is sure to get hit harder than that. If it does, the 50-day moving average currently near $238 could come into play, while the May lows of $242 may also buoy the name.Below those marks and maybe we get the slippery-slope decline down to $200-ish.Understand one thing though. When companies cement themselves behind a strong brand with impressive growth, investors will almost always pay a premium. As for growth, SHOP stock has it.Estimates call for last year's revenue of $1.07 billion to grow 41% to $1.51 billion this year. 2020 estimates call for 32.5% growth to $2.01 billion in sales. Essentially, Shopify is forecast to double its revenue from 2018 to 2020. Better than that is its earnings growth, though.Estimates call for earnings of 58 cents per share this year, up 52.5% year-over-year from 38 cents per share. In 2020, forecasts call for earnings of 94 cents per share, up 62%. Even better though, the company has a solid balance sheet and is turning free cash flow (FCF) positive. Cash and short-term investments stand at about $2 billion, with just $100 million in long-term debt.At almost 20 times this year's revenue and near FCF neutral, I'm not making the case that SHOP stock is cheap. But it's a name for growth investors to own should they be able to scoop it up on a steep discount. Conservative growth bulls may bite at $250, but will certainly be interested near $200. Let's see how it does this summer.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long TTD and ROKU. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Sell Impacted by the Mexican Tariffs * 6 Big Dividend Stocks to Buy as Yields Plunge * The 10 Biggest Announcements From Apple WWDC 2019 Compare Brokers The post Shopify Stock Has a Dip Coming, and You Definitely Should Buy into It appeared first on InvestorPlace.
Alongside the rest of the market, shares of hyper-growth cloud-communications company Twilio (NASDAQ:TWLO) dropped sharply in May. As a result of the broader weakness, Twilio stock now trades at roughly 15% off its 2019 highs.Source: Web Summit Via FlickrOstensibly, this selloff makes sense. The global economic growth picture is deteriorating thanks to rising international trade tensions. As that narrative sank, financial market conditions have become less favorable for growth stocks. Unquestionably, that characterization describes TWLO stock. As such, it makes some sense that shares are down big over the past few weeks.But upon closer inspection, the selloff actually doesn't make that much sense.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe factors dragging financial markets lower aren't really relevant to Twilio. Instead, TWLO stock is just falling in sympathy with the market and its fellow growth stocks. In actuality, the growth trajectory here remains exceptionally favorable for the long haul.To be sure, the valuation on Twilio stock is stretched here. It is not unreasonable to see shares fall to rational levels. But I want to emphasize that this selloff is temporary. * 6 Big Dividend Stocks to Buy as Yields Plunge Once the valuation comes in some, investors will realize the same fundamentals that initially catapulted TWLO stock remains intact. Therefore, you can expect shares to rebound substantially, getting back to its winning ways. The Negatives Against Twilio Stock Are OverstatedRight now, the market is lumping Twilio stock into a basket of high-growth equities vulnerable to mass-scale shifts. But that sweeping categorization is inappropriate.There are four factors which are weighing on equities at the current moment: rising trade tensions, a slowing global economy, low interest rates and the threat of government regulation. None of these factors apply in a harmful way to TWLO stock.On the trade front, Twilio is largely exempt from the threat of tariffs since this is a services company with a primarily domestic growth narrative. Tariffs on imported products are largely meaningless for Twilio.Meanwhile, while higher tariffs could reduce economic growth globally, cloud companies like Twilio could benefit in a slower growth environment. That's because they are low-cost solutions which enterprises could increasingly turn to when rethinking budgets and corporate spend.With respect to plunging yields, low interest rates actually help hyper-growth stocks with outsized valuations like Twilio by making their returns look relatively more attractive. Lastly, while big tech companies are under the regulation microscope, Twilio is far from being big or dominant enough to warrant any regulatory attention.All in all, then, the potential risks to the Twilio growth narrative and TWLO stock are presently overstated. The Core Growth Narrative Remains HealthyLooking past the overstated risks, the core growth narrative supporting Twilio stocks remains as healthy as ever. Indeed, it might even be healthier.In late April, Twilio reported jaw-dropping first-quarter numbers that underscored the strength of this company's secular revenue engine. Sales growth exceeded 80% year-over-year. Core revenue growth was closer to 90%. Customers more than doubled YOY. Gross margins remained well north of 50%. Operating leverage kicked, and an operating loss in the year ago quarter turned into a profit this quarter.Broadly, the numbers were really good: Big revenue growth combined with big customer growth. Stable and outsized gross margins. Falling opex rates. Ramping profits. All the boxes were checked off.Zooming out, all those boxes should continue to be checked off for the foreseeable future. Businesses are increasingly seeking to differentiate their customer experiences. An important part of that differentiation is the ability to communicate dynamically and in real time with customers through the mobile channel. Twilio enables this communication. Sure, there are lots of competitors in the space. But Twilio's growth rates imply that there aren't any competitors quite as good.This space is still relatively small today. Twilio only has about 155,000 customer accounts. There are over 30 million businesses in the U.S. who could use Twilio's services. Additionally, more than 100 million international firms could benefit. As such, this growth narrative is in the top of the first inning. As the game plays out over the next several quarters, growth rates will remain large and profits will surge higher.Most importantly, Twilio stock will get back to its winning ways. Bottom Line on TWLO StockThe market is having trouble right now because rising trade tensions threaten economic growth globally. But Twilio is one of the few growth stocks that doesn't have much exposure to these trade risks. Therefore, the growth narrative here will remain healthy. As the numbers prove this over the next few quarters, Twilio stock should bounce back from its recent selloff.As of this writing, Luke Lango was long TWLO. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Sell Impacted by the Mexican Tariffs * 6 Big Dividend Stocks to Buy as Yields Plunge * The 10 Biggest Announcements From Apple WWDC 2019 Compare Brokers The post Why Twilio Stock Can Keep Running Higher appeared first on InvestorPlace.
There's no denying Twilio (NYSE:TWLO) has been an impressive performer over the course of the past couple of years. Since the end of May 2017, Twilio stock has rallied more than 120%, backed by noteworthy sales growth.Source: Web Summit Via FlickrThe lack of actual GAAP earnings hasn't been a problem for its buyers, who apparently believe the company can address such minor, pesky problems at a later date. Except, maybe it won't be able to address that profit problem at a later date when it desperately needs to. And, even if it can, it may not matter.Take a closer look at Twilio, and you'll see prior red-hot growth rates aren't sustainable. Revenue is projected to improve by an amazing 70% this year, versus last year's 77%. Next year's projected top-line growth of 34% is still huge but a relative letdown. The following year's expected revenue growth of 26% is also better than average, but far from compelling to a crowd of TWLO stock owners accustomed to much more.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Bank Stocks to Leave in the Vault Worse, while Twilio's top line is stabilizing and normalizing, there's still not a hint of actual income let alone real income growth as that revenue rally starts leveling off. That's a problem for a ticker valued as richly as Twilio stock. Twilio, Reality and PerceptionFans and followers have most certainly already prepared their counterarguments, ranging from "You just don't understand the business" to the (fair and accurate) point that Amazon.com (NASDAQ:AMZN) wasn't profitable for years. A well-rehearsed crowd is also going to note that on an operational basis, Twilio actually is profitable. They'll argue GAAP numbers aren't an indication of the true strength of the business.All three arguments break down under scrutiny though.As for the Amazon argument, for every Amazon, there are five more companies like it that investors liked even more in their infancy that never survived. Palm Pilots, GeoCities, Gizmondo and etoys.com are just some of the names that come to mind.They all had a loyal fan base, and some of them even made a go of it. None of them had real staying power. They were unable to turn an actual profit (not just an operating profit) long enough to remain intact.As for the business itself, there's a distinct lack of barrier to entry. Now that Twilio and others have proven there's a market for cloud-based self-service-everything through the use of apps, more companies can replicate the idea.And they are. Nexmo and Bandwidth along with several other unfamiliar names are quietly moving into a price war with one another, but more concerning than that, powerhouse players like Cisco Systems (NASDAQ:CSCO) are slowly encroaching onto Twilio's turf.No young, unprofitable outfit wants to go toe-to-toe with a Cisco.And, as for the lack of real earnings, this is where the bullish case for Twilio stock starts to break down.Just for the sake of argument, let's say Twilio manages in the foreseeable future to drive typical tech profit margins of 10% of revenue. With 2021's projected revenue of $1.86 billion translating into earnings of $186 million, TWLO stock is still priced at a stunning 86 times its long-term forward-looking earnings.And of course, that's a stretch assumption. As the top line's ascent starts to fade along with operating income growth, reported (or GAAP) income is expected to continue to deteriorate.Sooner or later it's going to have to make some money, but it's not clear that's in the cards.Underscoring the concern that the bigger the company gets, the uglier its fiscal results become, is the cash flow trend to date.For a short while last year Twilio actually mustered positive cash flow, but on the heels of best-ever revenue last quarter, operating cash flow turned deeply negative again.It tacitly suggests that scale works against, rather than for, the business that's become increasingly crowded and now entered a price war/outspending phase. Bottom Line for Twilio StockPerhaps the final argument against any bearish thesis for Twilio is the fact that despite all the reasonable concerns, analysts still love it. The pros collectively rate it a little better than a "Buy" (stopping short of a "Strong Buy"), and the consensus target of $146.59 is 15% higher than the current value of Twilio stock. Surely this many analysts can't be wrong.They're not "wrong" per se, but they arguably are speculating.It's a reality that not even most people in the research industry care to concede, but these professional stock-handicappers are just as prone to buying into hype as the average retail investor is. This is one of those times where analysts may be making optimistic calls for the wrong reason. Maybe it's fear of being on the wrong side of the mob.So far it's worked out. Just bear in mind that the consensus target price for GoPro (NASDAQ:GPRO) back in 2014 shortly after its IPO was $60. Reality has dragged GPRO back to its current price near $6.Analysts dive into the hype-pool too. Too many of them choose to not even discuss a fan-favored company's weak spots, so the average investor won't either.That doesn't mean Twilio doesn't have them though.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Heavily Shorted Stocks to Sell -- Because the Bears Are Right * 7 Bank Stocks to Leave in the Vault * 7 Stocks for You to Profit From (Legal) Insider Trading Compare Brokers The post The Really Risky Side of Twilio Stock Nobody Wants to Talk About appeared first on InvestorPlace.
On CNBC's "Mad Money Lightning Round," Jim Cramer said he didn't like the last quarter Aramark (NYSE: ARMK ) reported. He would not buy the stock. Cramer would stay away from California Resources ...
The ongoing trade war between the U.S. and China is having an unmistakably negative effect on the technology sector. Numerous tech stocks have heavy Chinese exposure, whether it's via the rare-earth materials they use in their products, manufacturing done in China or just deriving a large percentage of revenues from the country. And their shares have been punished as the rift between the two countries has widened.As a group, the outlook is worrisome. But a few tech stocks are more shielded than others from Chinese trade issues. Just look to the cloud.Cloud computing has been a lucrative mega-trend on its own; whole industries have moved into scaled data centers, linked by fiber cable and wireless networks. But it also is shaping up to be something of a safe haven from trade concerns. China may make some of our devices, and their chips may go into our technology infrastructure, but the clouds themselves are ours, and so is the value inside them. Thus, many companies that operate cloud-based services look to be relatively well-insulated against this long-running U.S.-China trade spat.The following are six tech stocks that can help China-proof your portfolio. Many of these stocks have run hot in 2019, and some of them are expensive as a result. But each is also a strong long-term holding based on the merit of their technological innovations and the lucrative markets they address. SEE ALSO: 50 Top Stocks That Billionaires Love
Twilio Inc. (TWLO), the leading cloud communications platform, today announced the pricing of an underwritten public offering of 7,012,622 shares of its Class A common stock at a price to the public of $124.00 per share. The underwriters for the offering will also have a 30-day option to purchase up to an additional 1,051,893 shares of Twilio’s Class A common stock at the public offering price, less underwriting discounts and commissions. Twilio intends to use the net proceeds from this offering for general corporate purposes, which may include the acquisition of other companies or businesses, the refinancing or repayment of debt, capital expenditures, working capital and share repurchases.
Twilio stock was down 1.24% at $127.65 in mid-afternoon trading on The New York Stock Exchange Thursday after the San Francisco-based company said it plans to offer $750 million of its Class A stock. The San Francisco-based company has about 126 million shares outstanding. JPMorgan and Goldman Sachs are joint book-running managers for the offering.
Twilio (NYSE: TWLO) is enjoying an unbroken uptrend that began after the stock bottomed last year in November. The company's strong quarterly results validate the market's willingness to assign valuation for its shares. Nearly every analyst covering Twilio stock has a 'buy' rating and expect more upside to come. With shares pulling back only slightly from $140 to $133, is Twilio a compelling stock to invest in?Source: Web Summit Via FlickrOn April 30, Twilio reported revenue of $233.1 million, up a solid 80.6% from last year. It earned $0.05 (non-GAAP), which translates to an EPS GAAP loss of $0.31. Twilio owes its strong revenue growth to Flex getting included for the full quarter.Flex is a programmable contact center platform. Early adopters in the product are happy with it and will like it more as Twilio adds more features. The SendGrid division is showing signs of early success with satisfied customers. With customers enjoying a wider array of offerings, the five million registered developer accounts is a great achievement.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks to Buy for June Twilio for Salesforce (NYSE:CRM) brings its product closer to other big platforms, not to mention adds flexibility and convenience for customers. Expect the company forging many more close relationships with customers to support their applications. This will further drive customer growth worldwide. Fundamental Growth and Twilio StockTwilio's business model is fueled by a once in a generation opportunity to move customer legacy systems and hardware to Twilio's software platform. The business growth is a result of a strong sales and marketing team. As Twilio focuses on the enterprise globally, revenue will keep growing at a rapid clip.In the current second quarter, Twilio will have no trouble reaching a $1 billion annualized revenue rate ($250 million quarterly). Although it is too early to anticipate, the growth rate will eventually slow as the company gets significantly bigger.As long as the company continues to invest back into the business, the rate of growth will not slow by much. In this scenario, the average analyst target price of $151 is achievable in the next year. Investors could take it a step further and model revenue growth moderating to 20% in a 5-year Revenue Exit. Assuming a revenue exit multiple of 9.5 times, the fair value of TWLO stock is $150. Progress on New Product LaunchesFlex is still on a "version 1" but has the right architecture in place to build features from there. The product appeals to customers because the contact center functions are on the cloud and are fully customizable. The faster Twilio customizes the workflow for customers, the more productive end-users get. And the more fitting the product, the happier customers get.SendGrid offers timely account notification features that could extend next to SMS. The platform already has 80,000 customers. The product is of strategic importance to Twilio because it added a 300 basis point lift to gross margin in the first quarter.Though one large international customer skewed that figure, expect gross margins normalizing once Twilio adds companies in the telecom carrier space. Still, supporting multiple campaigns in SendGrid on one platform brings convenience for customers. So, as engagement on the cloud simplifies the process, customers may carry out an omnichannel strategy without much difficulty. Related InvestmentsInvestors may consider other cloud-based software providers besides Twilio. Okta (NASDAQ: OKTA) has a market cap of $12.51 billion, below Twilio's $16.91 billion market capitalization. Shopify (NYSE: SHOP) is even bigger with a $30.75 billion market cap. These related firms are bigger for a reason.On analyst day, Okta outlined its competitive advantage that will ensure its sustained growth momentum. Shopify reported revenue growing 40% in the first quarter to $141 million. Net income more than doubled to $10.3 million. The Bottom Line on Twilio StockTwilio shows no signs of slowing down. The stock is expensive, reflecting the upside ahead for at least the next few quarters. The stock may dip as market selling accelerates but so far, the Nasdaq's ~7% drop in the last month did little to hurt Twilio's stock price.Disclosure: None More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Sell Amid an Escalating Trade War * 5 REITs to Buy While They're Dirt Cheap * The Only 3 Marijuana Stocks You Need to Own Compare Brokers The post If You Can Catch Twilio Stock on the Dip, Buy and Hold appeared first on InvestorPlace.