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Why Twilio (TWLO) Outpaced the Stock Market Today

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Twilio (TWLO - Free Report) closed at $104.48 in the latest trading session, marking a +2.1% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.47%. On the other hand, the Dow registered a gain of 0.11%, and the technology-centric Nasdaq increased by 0.94%.

Coming into today, shares of the company had lost 3.16% in the past month. In that same time, the Computer and Technology sector gained 3.88%, while the S&P 500 gained 2.32%.

The investment community will be closely monitoring the performance of Twilio in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $1.05, reflecting a 2.94% increase from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $1.25 billion, indicating a 10.4% growth compared to the corresponding quarter of the prior year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.48 per share and revenue of $4.91 billion. These totals would mark changes of +22.07% and +10.14%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for Twilio. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.4% downward. Twilio presently features a Zacks Rank of #3 (Hold).

In terms of valuation, Twilio is currently trading at a Forward P/E ratio of 22.84. This represents a discount compared to its industry average Forward P/E of 31.21.

Also, we should mention that TWLO has a PEG ratio of 1.2. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Software stocks are, on average, holding a PEG ratio of 2.24 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 71, this industry ranks in the top 29% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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