TWLO: Voice AI And RCS Momentum Will Drive Stronger Share Performance

Analysts modestly raised their Twilio fair value estimate to $175 from $170, citing improving post earnings sentiment, a supportive revenue outlook driven by growing voice AI and RCS infrastructure demand, and resilient profitability expectations despite a slightly higher discount rate.

Analyst Commentary

Bullish analysts highlighted that the latest earnings update reinforced confidence in Twilio's execution, prompting upward revisions to price targets and reaffirmation of positive ratings. The modestly higher fair value and Street targets reflect growing conviction that the company can translate its AI and RCS positioning into durable revenue growth and margin resilience.

JPMorgan lifted its price target to $145 from $140, noting that Twilio is sounding better than expected following earnings. This, combined with fresh Overweight initiations, underscores a favorable shift in sentiment around the pace of recovery in communications volumes and the monetization of new AI driven use cases.

Coverage initiations with Overweight ratings and triple digit price targets signal that the market is increasingly viewing Twilio as structurally less exposed to AI disruption and better positioned as a key infrastructure provider, rather than a commoditized messaging vendor. This reframing supports higher multiples on both revenue and free cash flow as execution improves.

Bullish Takeaways

• Upward price target revisions, including a move to $145 at JPMorgan, indicate that bullish analysts see additional upside to Twilio's intrinsic value as confidence in post earnings execution strengthens.
• Fresh Overweight initiations with price targets around $130 support the view that Twilio's role in voice AI and RCS infrastructure can sustain above market growth, which some analysts see as justifying a premium valuation relative to legacy communications peers.
• Analysts point to low AI disruption risk and stronger voice AI momentum, including a return to double digit voice revenue growth in Q2, as key catalysts for accelerating top line trends and multiple expansion.
• Improving free cash flow generation and resilient profitability expectations are viewed as enhancing Twilio's risk reward profile, supporting higher discounted cash flow based fair value estimates despite a slightly higher discount rate.

What's in the News

• Raised full year 2025 guidance, lifting reported revenue growth expectations to 12.4% to 12.6% and organic revenue growth to 11.3% to 11.5% year over year, up from prior ranges of 10% to 11% and 9% to 10% respectively (Corporate guidance).
• Issued fourth quarter 2025 revenue guidance of $1.31 billion to $1.32 billion, reinforcing confidence in continued double digit top line expansion into year end (Corporate guidance).
• Completed repurchase of 6,421,000 shares, or 4.19% of shares outstanding, for $656.77 million under the buyback program announced January 23, 2025, including 3,389,000 shares bought in the most recent quarter for $349.8 million (Buyback tranche update).
• Announced a new multi year partnership with the NHL's LA Kings as the official away helmet partner, securing prominent brand placement across major North American media markets and integrating Twilio technology into enhanced fan engagement initiatives (Client announcement).
• Expanded its partnership with Vodafone Spain to power RCS messaging for Spanish businesses, positioning RCS as the new standard for rich, secure and measurable business to consumer communications in the market (Client announcement).

Valuation Changes

• Fair Value Estimate has risen slightly to $175 from $170, reflecting a modest increase in the intrinsic value assigned to Twilio shares.
• The Discount Rate has edged up to approximately 9.11% from 9.01%, implying a marginally higher required return for valuing future cash flows.
• Revenue Growth Assumptions have been reduced modestly to about 11.26% from 11.91%, indicating slightly more conservative top line expectations.
• The Net Profit Margin has improved slightly to roughly 12.10% from 12.04%, signaling a small upgrade to long term profitability assumptions.
• The Future P/E Multiple has decreased marginally to about 41.23x from 42.20x, suggesting a slightly lower valuation multiple applied to forward earnings.