Bernstein analyst Peter Weed has maintained their neutral stance on TWLO stock, giving a Hold rating yesterday.
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Peter Weed has given his Hold rating due to a combination of factors that include Twilio’s recent performance and future outlook. The company showed a notable improvement in revenue growth, reaching double-digit increases for the first time in two years, primarily driven by political spending and overcoming some previous challenges. However, the guidance for the upcoming quarter suggests a slight dip in growth, which could indicate conservative expectations amidst economic improvements.
Despite the positive revenue growth, Twilio faces challenges with its Gross Margins, which have been on a downward trend and remain lower than most SaaS businesses. This has impacted the Net Income, as margins remained thin and missed the consensus estimates. Additionally, while there is potential in AI-driven demand, it is still in the nascent stages, and any substantial benefits are yet to materialize. Overall, the valuation adjustments and modest growth expectations have led to the Hold rating, as the current potential does not strongly justify a more aggressive stance.
In another report released yesterday, Jefferies also maintained a Hold rating on the stock with a $145.00 price target.