“Twilio, being a pioneer of the [communications platform as a service] market, has been moving up the stack from voice/[short message service application programing interfaces] and disrupting legacy communication vendors,” Mizuho analysts, led by Siti Panigrahi, wrote in a report.
“We expect the company to sustain robust growth, benefiting from the API economy and adoption of cloud contact centers.
"With a differentiated technology, a breadth of products, a large [total addressable market], robust growth, and room to expand margins, Twilio remains attractive at current levels.”
And the coronavirus pandemic offers a reward for Twilio, the analysts wrote.
Its Flex product, a programmable contact center platform, “stands to benefit from covid-19, as our checks suggest it was a significant wakeup call to adopt cloud-based contact centers and messaging platforms,” the analysts said.
“In turn, this should help create a more predictable revenue stream, and drive long-term growth.”
Twilio has the top technology in the CPaaS market, “led by its super network of carriers and proprietary software layered on top,” the analysts said. “Its API-based architecture and reliability make it easier for developers to adopt.”
At last check, Twilio shares traded at $100.80, up 2%. That compares with a 2.84% decline for the S&P 500.
Twilio stock has fallen 15% over the past three months, compared with a 16% slide for the S&P 500.