Twilio Pops 11% After-Market On Surprise Profit In 4Q; Street Is Bullish

Shares of Twilio surged 11.4% in Wednesday’s extended market session after the cloud communications platform company surprised investors with posting a profit in the fourth quarter.

The company reported non-GAAP diluted earnings per share (EPS) of $0.04 in 4Q when analysts were expecting a loss of $0.08 per share. Revenues came in at $548.1 million, up by 65% year-on-year, and beating consensus estimates of $454.7 million.

Twilio’s (TWLO) CEO, Jeff Lawson, said, “Twilio’s 65% year-over-year total revenue growth in the fourth quarter continued the strength and momentum we saw throughout an outstanding year of results in which we delivered $1.76 billion in revenue.”

Lawson added, “These results reinforced that we are addressing a generational opportunity, and with our acquisition of Segment and strong traction with Flex, we are building the leading customer engagement platform to improve every interaction that businesses have with their customers.”

The company’s revenues in the fourth quarter of $548.1 million also included $23 million from Twilio’s acquisition of Segment. The company completed the $3.2 billion acquisition of Segment, a customer data platform, in the fourth quarter. Political traffic also contributed $22.7 million to 4Q revenues.

Twilio expects revenues in the first quarter to range between $526 million to $536 million and incur a non-GAAP loss per share of $0.12 to $0.09. The company forecasted a non-GAAP loss from operations of between $20 million to $15 million. (See Twilio stock analysis on TipRanks)

Following the 4Q results, Rosenblatt Securities analyst Ryan Koontz reiterated a Buy and a price target of $550 on the stock. Koontz said, “We increase our 1Q21, FY21, FY22 revenue estimates (by +3%, +4%, +4%) and expect consensus numbers to increase as well.”

“At its Q4 investor day, TWLO announced that it expects to sustain 30% y/y organic growth for the next 4 years – which we view as achievable with CPaaS [cloud communications platform) remaining at the forefront of a global shift to digitalization.” Koontz added.

The rest of the Street is bullish about the stock with a Strong Buy consensus rating. That’s based on 14 analysts recommending a Buy and 2 analysts say Hold. The average analyst price target of $447.67 implies about 8.7% upside potential to current levels.

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