Derrick Wood, an analyst from TD Cowen, maintained the Hold rating on Twilio (TWLO – Research Report). The associated price target was raised to $117.00.
Derrick Wood has given his Hold rating due to a combination of factors that reflect both positive momentum and potential challenges for Twilio. The company demonstrated a notable growth acceleration in the first quarter, with a 12% increase, surpassing previous quarters. This growth was driven by successful self-serve strategies and increased engagement with independent software vendors. Additionally, Twilio’s progress in cross-selling and multi-product adoption, along with stable macro demand, contributed to the positive outlook.
Despite these strengths, there are underlying concerns that justify the Hold rating. The gross margin was slightly below expectations due to the international messaging mix, and while operational margins exceeded street estimates, there are modest weaknesses in certain verticals like travel and e-commerce. Furthermore, although AI is emerging as a potential long-term growth driver, the macroeconomic environment remains uncertain, which could pose risks in the near term. These mixed signals led to a cautious approach, maintaining the Hold rating while slightly raising estimates and the price target.
In another report released yesterday, Jefferies also maintained a Hold rating on the stock with a $122.00 price target.