Twilio Proposes Sale Of $1B Class A Shares

Twilio has proposed an offering of $1 billion worth of its Class A common shares, the company said on Feb. 18.

All shares in the proposed offering will be sold by the cloud communications company. In addition, Twilio expects to grant underwriters a 30-day option to purchase up to an additional $150 million worth of shares of its Class A common stock.

Shares of Twilio (TWLO) fell 3% in after-hours trading after gaining 7.7% on Feb. 18. As of Feb. 18, TWLO had a market capitalization of approximately $67 billion.

Meanwhile, on Feb. 17, the company surprised investors by posting a profit for 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. (See Twilio stock analysis on TipRanks)

Following the 4Q results on Feb. 17, 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 19 analysts recommending a Buy and 2 analysts saying Hold. The average analyst price target of $499.74 implies about 12.7% upside potential to current levels.

The news related to TWLO stock over the past seven days indicates that the news sentiment is 100% bullish for the stock, compared to a sector average of 64% bullish.

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