Twilio pledges to a minimum of 30% annual growth in the next four years

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Oct 2, 2020
Updated: Oct 3, 2020
  • Twilio pledges to a minimum of 30% annual growth in the next four years.
  • The company expects a higher revenue in Q3 than previously estimated in August.
  • Twilio forecasts £1.24 billion of revenue and 7.73 pence of EPS for fiscal 2020.

Twilio Inc. (NYSE: TWLO) said on Friday that it is aiming for annual growth of a minimum of 30% in the next four years. The announcement came only a day after the company forecast a higher revenue in the fiscal third quarter than its August’s estimate of up to £313.80 million.

Twilio opened about 8% up on Friday. The stock continued the rally and gained another 5% later in the day. Including the price action, it is now exchanging hands at £224 per share versus £56 per share in March, when the impact of the Coronavirus pandemic was at its peak. Confused about choosing a reliable stockbroker to trade online? Here’s a comparison of the top few to make selection easier for you.

Experts’ forecast for Twilio’s third quarter

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According to Refinitiv, experts had forecast £315.26 million of revenue for Twilio in Q3. In the prior quarter (Q2), the company had reported a 46% annualised growth in revenue. For adjusted gross margin, Twilio estimates a range of 60% to 65% in the long term.

The American cloud communications platform has not announced the date for the release of its third-quarter earnings report so far. Twilio launched an app for frontline workers earlier this week.

On the back of the hawkish forecast, analyst J. Derrick Wood of Cowen Inc. raised his price target on Twilio from £239.60 per share to £270.51 per share. Derrick currently has a rating of ‘outperform’ on the company’s stock. On Friday, he also forecast revenue of roughly £3.86 billion for Twilio by the year 2024.

According to Derrick:

“The company’s forecast suggests Wall Street estimates are much too low, with consensus at 25% growth in the full financial year 2021 and 23% in fiscal 2022.”

Twilio’s guidance for fiscal 2020

For fiscal 2020, experts anticipate the San Francisco-based company to report £1.24 billion of revenue and 7.73 pence of earnings per share. Twilio currently boasts an overweight of buy rating from 22 analysts, holding rating from five analysts, and sell rating from only one.

14 analysts out of 28 in total raised their price targets on Twilio. The average price target now stands at £237.92 per share. In separate news from the U.S., Tesla Inc. said vehicle deliveries in the third quarter topped Wall Street estimates on Friday.

At the time of writing, Twilio is valued at £33.40 billion.

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