Analysts have raised their fair value estimate for Twilio from $130.88 to $135.25. They cite an improved company outlook following strong earnings, growing voice AI momentum, and expectations for sustained free cash flow generation.

Analyst Commentary

Following Twilio's recent earnings and updated outlook, analysts have provided new insights into the company's performance and future prospects. Their commentaries highlight both areas of optimism and potential caution moving forward.

Bullish Takeaways

• Bullish analysts have raised price targets and see Twilio as positioned for accelerated growth. They cite the company's improved revenue performance and enhanced guidance.
• There is increased confidence in Twilio’s ability to generate sustained free cash flow, with expectations that this financial strength will support long-term shareholder value.
• Several research notes point to Twilio’s growing momentum in voice AI. This includes robust infrastructure offerings and revenue growth in this segment returning to above double digits in recent quarters.
• The stock is viewed as having a compelling risk/reward profile. Analysts note that Twilio is approaching a key inflection point in its business model toward durable, profitable growth.

Bearish Takeaways

• Some analysts caution that Twilio’s outlook still depends heavily on execution in high-growth areas such as AI, and any stumbles could impact momentum.
• Ongoing technological transitions, like the RCS buildout cycle, require significant investment and may not immediately contribute to stable profitability.
• While the risk of disruption from AI is considered low by some, the competitive landscape remains active. Twilio's success in defending and expanding its niche will be closely watched.
• Certain analysts express reservations about the pace at which Twilio can deliver sustained margin improvement, especially as operating costs remain a consideration in the near term.

What's in the News

• Twilio raised its earnings guidance for fiscal year 2025, increasing reported revenue growth projections to 12.4% to 12.6% and organic revenue growth to 11.3% to 11.5%. (Corporate Guidance)
• The company has completed a significant share buyback, repurchasing over 6.1 million shares for $656.77 million under the buyback plan announced in January 2025. (Buyback Tranche Update)
• Twilio announced the global general availability of Rich Communication Services (RCS) messaging, enabling brands to send branded, verified, and interactive messages through a single platform integration. (Product-Related Announcements)
• Twilio extended its partnership with Vodafone Spain to provide Spanish businesses with RCS messaging, enhancing customer engagement and security in communications. (Client Announcements)
• New data and observability features, including Granular Observability and centralized alerting, have been launched to help enterprises build and manage trusted customer data infrastructure more efficiently. (Product-Related Announcements)

Valuation Changes

• The Fair Value Estimate has risen slightly, increasing from $130.88 to $135.25 per share.
• The Discount Rate has moved up modestly, from 8.92% to 9.02%.
• The Revenue Growth projection has fallen, adjusting from 7.85% to 7.47%.
• The Net Profit Margin forecast has decreased slightly, from 7.58% to 7.53%.
• The Future P/E Ratio estimate has increased marginally, rising from 57.51x to 58.22x.