TWLO Stock Overview
Twilio Inc., together with its subsidiaries, provides a cloud communications platform that enables developers to build, scale, and operate customer engagement within software applications in the United States and internationally.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$85.17|
|52 Week High||US$412.68|
|52 Week Low||US$77.14|
|1 Month Change||-16.29%|
|3 Month Change||-51.25%|
|1 Year Change||-78.09%|
|3 Year Change||-39.28%|
|5 Year Change||199.58%|
|Change since IPO||195.83%|
Recent News & Updates
Twilio: Still Problematic But Starting To Become Cheap
Twilio is now down circa 80% from its all-time highs. TWLO stock is now thoroughly washed out. Will Twilio's communication platform suffer meaningfully in a slowing economic environment? Probably now. Twilio's lack of ''clean'' profitability remains an issue. Will Twilio's guidance reemphasize that it's still on track to exit 2022 with non-GAAP breakeven profitability? Looking out to fiscal 2023, Twilio is priced at 3x sales. That's probably a cheap enough multiple. I upgrade my rating for TWLO stock from a sell to neutral. Investment Thesis Twilio (TWLO) is a leading communication platform. Twilio is well set up to disrupt the ways that companies rely on legacy technologies to communicate with their own customers. Disrupt. That's the keyword. And that's also why the stock has fully blown up. Investors latched on too tightly to the idea of a ''disruptor'' on the way up and now investors want nothing to do with yet another disruptive platform on the way down. And there are obvious reasons to avoid an investment in Twilio. More specifically, the business appears incapable of turning a clean profit any time soon. That being said, I now question whether insight may have already been factored in many times over already? Hence, in this new context, I upgrade Twilio to neutral from sell. A Very Fast Moving Market Two months ago, I issued Twilio with a sell rating: Author's coverage Since then, the stock has sold off substantially in a short period of time, and it's down 30% in two months. And despite being directionally correct, I'm now updating my stance to a neutral stance. Here's why. Investing is not a science. It's more of art combined with mathematical odds. There are times when the odds are slightly more aligned in one direction than the other. But as a long-only investor, I'm much more interested in finding stocks that could work out positively than couldn't. What's more, I acknowledge that the game is not about timing the bottom on the stock. It's about buying low and selling high. That's it. But at the same time, even without being able to buy at the bottom, there are times when an investment looks more favorable and when it looks less favorable. Case in point: Back in May, when I issued my sell rating, I noted that Twilio was priced at 6x forward sales. And then I went on to say, I'm inclined to believe that this stock is now fairly valued. That being said, keep in mind, that the main blemish here is that Twilio simply can't stop stemming losses. When I made those statements, Twilio was priced at $122 per share. Today Twilio is priced at $85. And always keep in mind the context, that from its highs Twilio is down circa 80%. Hence, I believe that there becomes a point when investors can only meet a stock with despondency where there was once passion. With all this in mind, I'm now upgrading my rating to a neutral rating. There are still the same issues that there were in May. But investing is about context. And the context is that countless small and midcap players in tech are now down more than 75%. These are viable businesses, but the significant passion for these businesses has now washed out. TWLO Stock Valuation - Looks Very Reasonable There are two negative considerations at play and one positive consideration. The positive is that we are now over halfway through 2022 and we can start to price 2023. Looking out to 2023 Twilio is priced at 3x forward sales. Is that a fair multiple for a SaaS business? I don't know. Data by YCharts Let's think this through. What we see above is that Twilio is now priced at 4x this year's sales, fiscal 2022. While I don't know if this indeed is the fair multiple for a SaaS business, I have to keep in mind that this is a dramatic compression in its multiple from this time a year ago, when Twilio was being priced at 24x forward sales. Could Twilio's multiple compress even further? It could. But is it likely to substantially compress further? I'm not entirely convinced. Why could Twilio's multiple compress further? This is what we discuss in the next section. Two Investment Risks Facing Twilio There are two risks facing Twilio. The first is its lack of profitability and the second is the potential impact of a recession on Twilio's business model. As you know, for fiscal Q2 2022, Twilio's non-GAAP operating margins were 1%. Meanwhile, Twilio has often cited that it will look to exit 2022 with non-GAAP operating margins at a breakeven level. This includes stock-based compensation being added back, of course. If Twilio's upcoming earnings show that despite a slowing business environment it is still on track to exit 2022 with non-GAAP operating margins at breakeven, that would be very much bullish for the stock. But if the narrative were to change, and Twilio gave investors the impression that its path to breakeven is now further away, investors would not look kindly towards the stock. Twilio is a communication platform. For companies that wish to get their message out to their own customers, to contact their customers through their own first-party data, Twilio's platform provides this solution. And this takes me to my second investment risk. Given that we are now facing an imminent recession, it's only logical to ask the following question. Will demand for Twilio's products be materially reduced during a recession? Will its customers view Twilio's products as a critical service?
Can Twilio Stock Recover To $200? Don't Even Think About It
We believe Twilio's weak free cash flow profitability is a critical factor that worsened the market's perception of its valuation. Therefore, TWLO remains overvalued. Our price action analysis suggests that its near-term bottom has been breached. Therefore, investors should watch for a re-test of its $68 support zone. We reiterate our Hold rating on TWLO stock. Without a sustained bottom, investors should not even consider it reaching $200 anytime soon.
Is Twilio (NYSE:TWLO) Using Too Much Debt?
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' When we think about how risky a company...
|TWLO||US IT||US Market|
Return vs Industry: TWLO underperformed the US IT industry which returned -35.2% over the past year.
Return vs Market: TWLO underperformed the US Market which returned -21.2% over the past year.
|TWLO Average Weekly Movement||12.2%|
|IT Industry Average Movement||9.9%|
|Market Average Movement||8.1%|
|10% most volatile stocks in US Market||16.9%|
|10% least volatile stocks in US Market||3.3%|
Stable Share Price: TWLO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 12% a week.
Volatility Over Time: TWLO's weekly volatility (12%) has been stable over the past year.
About the Company
Twilio Inc., together with its subsidiaries, provides a cloud communications platform that enables developers to build, scale, and operate customer engagement within software applications in the United States and internationally. Its customer engagement platform provides a set of application programming interfaces that handle the higher-level communication logic needed for nearly every type of customer engagement, as well as enable developers to embed voice, messaging, video, and email capabilities into their applications. The company was incorporated in 2008 and is headquartered in San Francisco, California.
Twilio Fundamentals Summary
|TWLO fundamental statistics|
Is TWLO overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|TWLO income statement (TTM)|
|Cost of Revenue||US$1.61b|
Last Reported Earnings
Mar 31, 2022
Next Earnings Date
|Earnings per share (EPS)||-5.31|
|Net Profit Margin||-30.86%|
How did TWLO perform over the long term?See historical performance and comparison
Is TWLO undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 2/6
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for TWLO?
Other financial metrics that can be useful for relative valuation.
|What is TWLO's n/a Ratio?|
Price to Sales Ratio vs Peers
How does TWLO's PS Ratio compare to its peers?
|TWLO PS Ratio vs Peers|
|Company||PS||Estimated Growth||Market Cap|
AKAM Akamai Technologies
Price-To-Sales vs Peers: TWLO is good value based on its Price-To-Sales Ratio (4.9x) compared to the peer average (12.9x).
Price to Earnings Ratio vs Industry
How does TWLO's PE Ratio compare vs other companies in the US IT Industry?
Price-To-Sales vs Industry: TWLO is expensive based on its Price-To-Sales Ratio (4.9x) compared to the US IT industry average (2.4x)
Price to Sales Ratio vs Fair Ratio
What is TWLO's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PS Ratio||4.9x|
|Fair PS Ratio||8.1x|
Price-To-Sales vs Fair Ratio: TWLO is good value based on its Price-To-Sales Ratio (4.9x) compared to the estimated Fair Price-To-Sales Ratio (8.1x).
Share Price vs Fair Value
What is the Fair Price of TWLO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: TWLO ($85.17) is trading above our estimate of fair value ($50.47)
Significantly Below Fair Value: TWLO is trading above our estimate of fair value.
Price to Earnings Growth Ratio
PEG Ratio: Insufficient data to calculate TWLO's PEG Ratio to determine if it is good value.
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How is Twilio forecast to perform in the next 1 to 3 years based on estimates from 29 analysts?
Future Growth Score2/6
Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: TWLO is forecast to remain unprofitable over the next 3 years.
Earnings vs Market: TWLO is forecast to remain unprofitable over the next 3 years.
High Growth Earnings: TWLO is forecast to remain unprofitable over the next 3 years.
Revenue vs Market: TWLO's revenue (22.3% per year) is forecast to grow faster than the US market (8.2% per year).
High Growth Revenue: TWLO's revenue (22.3% per year) is forecast to grow faster than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: TWLO's Return on Equity is forecast to be low in 3 years time (0.2%).
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How has Twilio performed over the past 5 years?
Past Performance Score0/6
Past Performance Score 0/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: TWLO is currently unprofitable.
Growing Profit Margin: TWLO is currently unprofitable.
Past Earnings Growth Analysis
Earnings Trend: TWLO is unprofitable, and losses have increased over the past 5 years at a rate of 54.3% per year.
Accelerating Growth: Unable to compare TWLO's earnings growth over the past year to its 5-year average as it is currently unprofitable
Earnings vs Industry: TWLO is unprofitable, making it difficult to compare its past year earnings growth to the IT industry (21%).
Return on Equity
High ROE: TWLO has a negative Return on Equity (-8.84%), as it is currently unprofitable.
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How is Twilio's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
Stable Cash Runway
Forecast Cash Runway
Financial Position Analysis
Short Term Liabilities: TWLO's short term assets ($5.8B) exceed its short term liabilities ($719.8M).
Long Term Liabilities: TWLO's short term assets ($5.8B) exceed its long term liabilities ($1.3B).
Debt to Equity History and Analysis
Debt Level: TWLO has more cash than its total debt.
Reducing Debt: Insufficient data to determine if TWLO's debt to equity ratio has reduced over the past 5 years.
Cash Runway Analysis
For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.
Stable Cash Runway: TWLO has sufficient cash runway for more than 3 years based on its current free cash flow.
Forecast Cash Runway: Insufficient data to determine if TWLO has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.
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What is Twilio current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Future Dividend Coverage
Dividend Yield vs Market
Notable Dividend: Unable to evaluate TWLO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate TWLO's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if TWLO's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if TWLO's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as TWLO has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Jeff Lawson (45 yo)
Mr. Jeffrey Lawson, also known as Jeff, has been Director of SendGrid Inc. since February 1, 2019. Mr. Lawson co-founded Twilio Inc. in 2008 and has been its Chief Executive Officer since April 2008 and Ch...
CEO Compensation Analysis
Compensation vs Market: Jeff's total compensation ($USD14.63M) is about average for companies of similar size in the US market ($USD13.34M).
Compensation vs Earnings: Jeff's compensation has increased whilst the company is unprofitable.
Experienced Management: TWLO's management team is not considered experienced ( 0.6 years average tenure), which suggests a new team.
Experienced Board: TWLO's board of directors are considered experienced (5.5 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: TWLO insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6.1%.
Twilio Inc.'s employee growth, exchange listings and data sources
- Name: Twilio Inc.
- Ticker: TWLO
- Exchange: NYSE
- Founded: 2008
- Industry: Internet Services and Infrastructure
- Sector: Software
- Implied Market Cap: US$15.474b
- Shares outstanding: 181.68m
- Website: https://www.twilio.com
Number of Employees
- Twilio Inc.
- 101 Spear Street
- First Floor
- San Francisco
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/07/03 00:00|
|End of Day Share Price||2022/07/01 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.