Friday - Scotiabank (TSX:BNS) has increased its price target on Twilio (NYSE:TWLO) shares to $160 from the previous $90, while maintaining a Sector Outperform rating. Currently trading near its 52-week high of $117.92, the stock has delivered an impressive 101% return over the past six months. The adjustment follows Twilio's preliminary fourth-quarter results, which showed an 11% growth, surpassing the 8% consensus. Analysts at Scotiabank highlighted the company's positive performance and future prospects, including attractive margin targets and additional share repurchase authorization. According to InvestingPro, 24 analysts have recently revised their earnings estimates upward for the upcoming period.
Twilio's forward-looking margin targets are set at 21%-22% for fiscal year 2027, with expectations of over $3 billion in cumulative free cash flow from fiscal year 2025 to fiscal year 2027. The company's strong financial position is evident in its $824.5 million in levered free cash flow and healthy current ratio of 5.06. Additionally, the company has authorized an extra $2 billion in share repurchases through fiscal year 2027. InvestingPro data reveals management has been aggressively buying back shares, with 12 more exclusive insights available to subscribers. These financial strategies have increased Scotiabank's confidence in their Sector Outperform rating for Twilio.
Management at Twilio has indicated that the company is positioning itself to deliver double-digit growth over time, which could potentially exceed the already positive targets. The reaffirmation of this growth strategy was a key message during Twilio's recent analyst day.
The company has demonstrated two quarters of reacceleration and continued margin expansion. Moreover, Twilio's narrative around its advancements in artificial intelligence adds to its appeal as an investment, according to Scotiabank analysts. They have adjusted their model to account for the preliminary results and the future framework, but they consider their new estimates to be conservative despite the increased price target.
In summary, Twilio's recent analyst day provided reassurance and clarity on its growth trajectory and financial health, prompting Scotiabank to raise its price target while reiterating a positive outlook on the stock.
In other recent news, Twilio Inc. has been the subject of noteworthy developments. The company's preliminary fourth-quarter results exceeded expectations, leading to JMP Securities raising its price target for Twilio to $165. Baird analysts also upgraded their rating on the company from Neutral to Outperform, with a significant increase in the price target to $160. Other analyst firms such as Oppenheimer and Mizuho (NYSE:MFG) Securities have also raised their price targets for Twilio to $160 and $150 respectively, maintaining an Outperform rating.
Twilio has also announced a $2 billion share buyback plan, signaling management's confidence in the company's future growth. The company's recent initiatives include the integration of Segment with its Communication platform, the addition of more automation, AI enhancements, and an organizational realignment.
Twilio's Q3 2024 revenue saw a 10% year-over-year increase, reaching $1.13 billion, largely attributed to its Communications segment. However, Dana Wagner, the Chief Legal Officer and Corporate Secretary, has decided to resign, effective from January 1, 2025. These are the recent developments for Twilio.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.