Analysts Dive in on Two Volatile Stocks: Twilio Inc (TWLO) and Endo International plc (ENDP)

Twilio Bounces Back with a Strong 2Q

Investors are most pleased with Twilio Inc (NYSE:TWLO) second-quarter earnings, sending shares of the communications-software maker soaring nearly 11% in Tuesday’s trading session.

Twilio reported 2Q:17 sales of $95.9 million that handily exceeded Street estimates of $86.3 million, while a loss per share of $0.05 was better than Street projection of a loss per share of $0.11. For 3Q:17, Twilio expects sales of $91.0-93.0 million, compared to Street expectations of $89.7. Furthermore, Twilio increased its 2017 sales outlook to $371.0-375.0 million, beating the Street at $359.8 million.

In the wake of the earnings beat, Oppenheimer analyst Ittai Kidron reiterates an Outperform rating on Twilio shares, with a price target of $38, which implies an upside of 12% from current levels. (To watch Kidron’s track record, click here)

Kidron opined, “Twilio reported strong 2Q17 results, gave equally strong Sept.-quarter guidance, and increased its full-year guidance. Overall, the results validate our view that challenges with Uber are an exception and transitory in nature. Metrics indicate that, ex-Uber, Twilio continues to experience impressive growth in new customers, size of new customers, and existing customer usage. With improving customer diversity, a new platform approach (Engagement Cloud), and unchanged competitive environment, we believe Twilio has multiple growth divers ahead. We maintain our long-term bullish view on Twilio as the transition to cloud-based A2P communication continues given its market-leading position.”

Out of the 10 analysts polled in the past 3 months, 8 rate Twilio stock a Buy, while 2 rate the stock a Hold. With a return potential of 8%, the stock’s consensus target price stands at $36.57.

Endo International plc

Endo International plc (NASDAQ:ENDP) shares sank as much as 10% today, after the drug maker lowered its 2017 guidance to $3.38-$3.53 billion in revenues and $3.35-$3.65 in adj. diluted EPS from $3.45-$3.60 billion and $3.45-$3.75 to account for market withdrawal of Opana ER and its planned shutdown of a manufacturing plant.

In reaction, Cantor analyst Louise Chen slashed his price target on ENDP from $12.00 to $9.00, while reiterating a Neutral rating on the stock. (To watch Chen’s track record, click here)

Chen commented, “The decrease in our PT is driven by downward earnings revisions. We use a blend of DCF and EV/EBITDA analysis to arrive at our new PT. ENDP is a generics and specialty pharmaceutical company with one of the best management teams in the industry, in our view, members of which have all successfully grown other established generics companies. During the quarter, ENDP made progress across an array of strategic initiatives, including settling mesh litigation, divesting Litha, signing a definitive agreement to divest Somar, and the restructuring of its manufacturing network. That said, uncertainty regarding ENDP’s earnings potential in 2018+ keeps us on the sidelines for now. These headwinds include: 1) offsetting sales lost to competition for Seroquel XR and Zetia and the removal of Opana ER from the market, 2) inability to divest non-core assets or get the price Endo wants for them, and 3) A generic filer for Vasostrict. We would be more positive on ENDP stock if earnings visibility improves in 2018+.”

The overwhelmingly majority of analysts say ENDP is a “hold.” The average forecast is for the stock to hit $14.27 in the coming months, according to data compiled by TipRanks, a site that tracks and ranks analysts on their predictions.


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