Twilio (TWLO) Gains a Price Target Lift from Top Analyst Following Impressive 1Q18 Print

Moness Crespi's Brian White now angles for 27% in return potential for TWLO shares.

Twilio Inc (NYSE:TWLO) has handed over an impressive first quarter beat for the year that has Wall Street out in an absolute buying frenzy today. Shares are racing up 17% in the market for a first quarter with monster revenue growth and a full-year guidance lift, indicating a positive path ahead for the tech player.

Top analyst Brian White at Monness Crespi sings the praises of what he deems “an exceptional quarter across the board,” one that further highlights that “the 2018 rebound continues” to be in full swing.

In reaction to the strength of the print, the analyst reiterates a Buy rating on TWLO stock while boosting the price target from $60 to $66, which implies a just under 27% upside from current levels.

For the first quarter, the cloud-based communications specialist posted a 48% year-over-year surge in revenue to $129.1 million that outclassed the analyst’s expectations of $116.5 million and the Street’s $116.6 million. Additionally, TWLO dished out a loss per share of $0.04 that beat out the analyst’s loss per share forecast of $0.06 as well as the Street’s loss per share expectations of $0.07. Worthy of note, the TWLO management team had set its first quarter guide for sales to hit between $115 and $117 million and loss per share to fall between $0.07 and $0.06. Uber comprised of only a 4% slice of first quarter sales. Moreover, the company brought on 5,006 new customers in the quarter, bringing its total base to 53,985 customers.

Glancing ahead to the second quarter, TWLO set sales expectations between $129 and $131 million, surpassing the Street’s $122.8 million, angling for a loss per share between $0.06 and $0.5 against the Street’s loss of $0.06. The company encouragingly lifted its 2018 guide, bumping up sales from $506 to $514 million up to $538 to $544 million; and loss per share from $0.14 to $0.10 up to $0.10 to $0.07. Accordingly, the analyst takes his second quarter sales forecast on an upturn from $122.3 to $130.2 million while tweaking his loss per share expectations from a loss per share of $0.04 to $0.05. For this year, the analyst jumps his sales projection up 36% from $512.3 to $542 million and revises his loss per share forecast from a loss per share of $0.10 to $0.09. For next year, the analyst his lifting his revenue estimate up 21% from $621.8 to $653.8 million and adjusts his loss per share forecast from a loss per share of $0.01 to $0.02.

White cheers, “Last night, Twilio delivered 1Q18 results that sailed through our expectations (and the Street) and the company raised its 2018 outlook. Given the Uber shock last year, Twilio’s stock fell by 18% in 2017 compared to more than a 60% rise for our software coverage; however, we believe the strong fundamental trends at the company and further improvement in investor sentiment will continue to drive the stock higher in 2018. Moreover, Twilio is trading at an enterprise value to revenue ratio of just over 6.5x our CY19 estimates, which we believe is attractive for a high growth company that just completed its IPO in June 2016.”

Bottom line, the analyst is “feeling the momentum and new opportunities opening up” for Twilio, anticipating that “new product areas such as Twilio Flex (GA by the end of 2018) can open up a new pillar of growth for the company in the coming years.” After all, “During 1Q18, Twilio eclipsed the 2 million developer barrier, a testament to the value-add of the platform,” concludes White.

Brian White has a very good TipRanks score with a 69% success rate and a high ranking of #73 out of 4,787 analysts. White garners 16.6% in his annual returns. When recommending TWLO, White realizes 28.7% in average profits on the stock.

TipRanks showcases TWLO as a strong bullish bet on Wall Street. Out of 9 analysts polled in the last 3 months, 8 rate a Buy on TWLO stock while 1 maintains a Hold.

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