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Twilio's Strong Earnings Garner Positive Wall Street Comments

Twilio draws positive comments from Wall Street after the cloud communications company delivers strong earnings.
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Twilio  (TWLO) - Get Twilio, Inc. Class A Report drew positive comments from numerous analysts after the cloud communications company delivered a strong earnings report.

One analyst, Piper Sandler’s Brent Bracelin, raised his share-price target to $365 from $315.

Twilio traded at $296.45, down 1.44%, but has soared 206% year to date through Monday.

“Accelerating direct to consumer (DTC) tailwinds in the post Covid era contributed to accelerating growth to 52% year-on-year (vs. 46% last quarter) and a $40 million-plus revenue beat,” he wrote in a commentary.

“We are raising our revenue estimates by $58 million this year and $81 million next year and raising our price target on strong secular tailwinds, a solid track record of execution, and an increasingly strategic technology platform that is helping power DTC initiatives for global brands like Nike, Lululemon, Walmart, Netflix, and others,” Bracelin added.

Bracelin said he sees “the potential for revenue to expand to $6 billion to $10 billion within five years as the customer engagement platform of choice.”

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Other firms issuing optimistic comments include Morgan Stanley, J.P. Morgan, Davidson and JMP.

Morgan Stanley’s Meta Marshall has an overweight rating and a $340 share-price target. 

“TWLO’s Q3 beat expectations as DBNE [dollar-based net expansion rate] reaccelerated on digital transformation and election use cases outperforming,” she wrote.

“Gross margins and profitability expectations dented in near-term on messaging resurgence and sales investments, but continue to favor story as use cases and platform expands,” Marshall added.

J.P. Morgan analyst Mark Murphy has a neutral rating and a $300 share-price target. 

“Solid Execution drives [the] upside. Gross margin [is a] headwind, but demand inputs are healthy,” he wrote.