Twilio stock fell 1.6 percent in after-hours trading on Oct. 26 after the company posted its third-quarter earnings results. Twilio's results were better than expected, but a weak earnings outlook for the fourth quarter pushed its stock price down.
What is Twilio?
Twilio is a cloud CPaaS (communications platform-as-a-service) company. The company's tools enable app developers to embed text messages, video, and voice into their products. Twilio was founded in 2008 by Jeff Lawson, John Wolthuis, and Evan Cooke. The company is based in San Francisco.
Twilio’s Q3 earnings results
In the third quarter, Twilio reported an adjusted EPS of $0.04 compared to $0.03 in the third quarter of 2019. The adjusted EPS beat analysts’ average estimate of -$0.03. Twilio generated sales of $448 million in the third quarter, which was 51.8 percent more than it did in the third quarter of 2019. The company beat analysts’ average sales estimate of $409.9 million. Twilio has benefited from a surge in demand for cloud communication tools due to the work-from-home trend amid the COVID-19 pandemic.
Twilio stock falls after hours
On Oct. 26, Twilio stock fell 1.6 percent in the after-hours trading session. The stock fell after the company issued a weak earnings outlook for the fourth quarter. Twilio expects revenue of $450 million–$455 million in the fourth quarter and adjusted loss per share of between $0.08 and $0.11. In comparison, Wall Street analysts expect Twilio to post revenue of $437.4 million and an adjusted EPS of $0.02 in the fourth quarter.
What is TWLO’s stock price today?
Twilio stock was down about 0.9 percent at $298 in pre-market trading on Tuesday, Oct. 27 as of 6:52 a.m. ET. The stock fell 1.8 percent on Oct. 26 and closed at $300.62 with a market capitalization of $44.6 billion. Twilio stock has fallen by 2.8 percent in the last five days, while it has risen by 186 percent in the last year.
Twilio stock is trading 12 percent below its 52-week high of $341.70 and 341.7 percent above its 52-week low of $68.06. Year-to-date, the stock had risen by 205.9 percent as of Oct. 26.
What is Twilio’s stock forecast?
Currently, analysts' stock price forecast for Twilio is $336.83, which suggests a 12 percent upside. The highest target price of $380 implies a 26.4 percent upside, while the lowest target of $169 suggests a 43.8 percent downside. Among the 28 Wall Street analysts tracking Twilio, 22 recommend a buy, five recommend a hold, and one recommends a sell.
The current weakness in Twilio stock is likely a buying opportunity for long-term investors. The company has been benefiting from the shift toward remote work amid the COVID-19 pandemic. Also, Twilio’s guidance for the fourth quarter is very conservative since there isn't a reason for the momentum to slow down.