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Twilio Jumps Post-Earnings as Analysts Lift Price Targets

Twilio shares surge after the cloud-based software maker reports a fourth-quarter earnings beat, prompting at least two analysts to lift their price targets.

Twilio  (TWLO)  shares jumped on Thursday after the cloud-based software provider reported fourth-quarter sales and earnings that were better than analysts’ forecasts, prompting at least two Wall Street analysts to lift their price targets.

At last check, Twilio was up 7.46% at $442.74 after the San Francisco-based company posted fourth-quarter adjusted earnings of 4 cents a share, far better than the adjusted loss of 8 cents a share expected by analysts polled by FactSet.

Revenue jumped 65% to $548.1 million. 

For the current quarter, Twilio said it expects a loss of between 9 cents and 12 cents a share vs. current estimates of a 2 cent loss. Revenue is expected to come in around $531 million vs. estimates of $491 million.

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Analysts were quick to zero in on Twilio’s better-than-anticipated dollar-based net expansion rate - a metric the company and its followers use to measure growth from existing customers. Twilio said its dollar net expansion rate was 139% in the fourth quarter vs. 137% in the third quarter and 125% in the year-earlier period.

The software maker's customers include Uber Technologies  (UBER) , Lyft  (LYFT) , Instacart, DoorDash  (DASH) , Grubhub undefined and Postmates. Twilio said it now has 221,000 active customer accounts, up from 179,000 at the end of 2019.

Piper Sandler analyst Brent Bracelin called the results “strong,” noting in a research note to clients that accelerating growth reinforces his positive longer-term outlook for the company. Bracelin raised his one-year price target to $550 from $475; the stock remains one of his top cloud software picks for 2021.

KeyBanc analyst Alex Kurtz, meantime, said he continues to see Twilio as a “premium growth asset” with good visibility for the next several years and strong revenue retention rates. He raised his one-year price target to $550 from $420 on the company’s higher sales expectations.