It’s time to break down a popular software name. Here is the break down of $TWLO, otherwise known as Twilio.
Current Price: $355.80
52/Wk High: $457.30
52/Wk Low: $79.25
Market Cap: $60.7 Billion
Read below for the breakdown!
Twilio ($TWLO) is a leading software and cloud company that offers customers a cloud communications platform that gives developers the power to build and operate a real-time communications platform across software applications.
In recent weeks, the leading software and clouds names have been selling off on inflation fears, revealing a possible opportunity in Twilio after the stock dropped over 16% throughout the past month.
Taking a look at Twilio, many of its customers are well known names such as Lyft, Chime, Stripe, United Way, CocaCola, Airbnb, Glassdoor, Salesforce, Yelp, Zendesk, Dell, Twitter, Twitch, and many more strong companies.
In recent news, Twilio completed the acquisition of Segment, a leading customer data platform for $3.2 billion.
Management was upbeat about the acquisition.
“With the addition of Segment, Twilio's Customer Engagement Platform now enables companies to both understand their customer, and engage with them digitally -- the combination is key to building great digital experiences,” CEO Jeff Lawson said.
Digging into the numbers, Twilio beat Q4 2020 expectations with an EPS of $0.04, better than the analysts EPS consensus estimate of $-0.07. Although, on a year over year basis, EPS remained flat.
While earnings per share remained flat, revenues continued to move to the upside, increasing 65% year over year to a strong $548.1 million in Q4.
Furthermore, Twilio’s dollar based net expansion rate increased to 139%, representing a jump from the 125% in the year prior.
Unfortunately, Twilio continued to run a loss from operations of $185.3 million (GAAP) for the quarter, which is more than the previous year's operating loss of $93.8 million.
On the flip side non-GAAP net income from operations totaled $12.8 million, representing a significant jump from the Q4 2019 level of $-3.0 million.
Rounding out Q4, Twilio reported over 221,000 active customer accounts, representing a jump of over 42,000 active accounts from the previous years level of 179,000.
Looking into the full year, Twilio rounded out FY 2020 with $1.76 billion in revenues, representing a strong revenue jump of 55% year over year.
While revenues improved, Twilio reported a FY 2020 GAAP loss from operations of $492.9 million, greater than the previous years loss of $369.8 million.
Management also provided solid guidance, expecting Q1 2021 revenues to land within a range of $526 million to $536 million, representing 44% to 47% growth in revenues.
Shifting into the balance sheet, the numbers are solid.
Total Debt: $329 Million
Total Liabilities: $1.035 Billion
Total Assets: $9.487 Billion
Cash & Short Term Inv: $3.040 Billion
On a valuation basis, Twilio does trade at a premium.
Forward Price to Earnings: 1178.15x
Price to Sales: 34.07x
Price to Book: 6.67x
Leadership could be more effective.
Return on Equity: -7.71%
Return on Assets: -6.71%
Return on Invested Capital: -7.04%
Given the numbers the analysts are bullish, with a mean price target of $508.38/share, representing a 42.88% upside.
The high price target is $550.00/share, representing a 54.58% upside, while the low price target is $425.00/share, representing a 19.45% gain.
The big money is also quite involved with 79.90% of Twilio being owned by institutions. Top holders include The Vanguard Group, Morgan Stanley Investment Management, and Jennison Associates.
On a technical basis, Twilio could be presenting opportunity. According to the six-month charts the MACD is attempting to cross back to the upside within a tight range around -6.5756.
The six-month charts are also indicating an RSI of 44.86 and CCI of -72.3778, both of which are on the low end.
In short, Twilio ($TWLO) is a solid company with expanding revenues, a strong rolodex of customers, and is within a growing industry but still carries issues such as an expanding operating loss.
EAT - SLEEP - PROFIT
Disclaimer: This is not direct financial advice, simply an opinion based on independent research.