Twilio Inc (TWLO, Financial), a leading cloud communications platform, has experienced a significant fluctuation in its stock price over recent periods. With a current market capitalization of $13.41 billion, the stock is trading at $74.09, reflecting a 9.02% loss over the past week. However, looking at a broader timeframe, Twilio's shares have gained an impressive 24.45% over the past three months. This recent performance contrasts sharply with the stock's previous valuation, where it was considered a possible value trap, urging investors to think twice. Currently, Twilio's stock is deemed significantly undervalued, with a GF Value of $145, a stark difference from its past GF Value of $253.43.
Twilio's Market Position and Business Model
Twilio operates within the interactive media industry, providing a versatile cloud-based communications platform-as-a-service. The company's offerings include a suite of customizable customer engagement tools that span voice, video, chat, and SMS messaging. Twilio's Super Network, a global network of carrier relationships, ensures high-speed and cost-effective communication. This innovative approach to customer engagement has positioned Twilio as a key player in its sector, enabling businesses to create tailored communication experiences.
Assessing Twilio's Profitability
Twilio's Profitability Rank stands at 3 out of 10, indicating challenges in this area. The company's Operating Margin is currently at -13.52%, which, despite being negative, fares better than 31.8% of its industry peers. Similarly, Twilio's Return on Equity (ROE) and Return on Assets (ROA) are -8.56% and -7.18%, respectively, outperforming 37.3% and 36.98% of competitors. The Return on Invested Capital (ROIC) is also in the negative territory at -7.31%, yet it surpasses 36.21% of other companies in the industry. These figures suggest that while Twilio is not the most profitable, it is not the least profitable either when compared to its competitors.
Twilio's Growth Trajectory
Twilio's Growth Rank is a robust 8 out of 10, reflecting its strong expansion in revenue. The company's 3-Year Revenue Growth Rate per Share stands at 33.80%, and its 5-Year Revenue Growth Rate per Share is even higher at 36.20%, both outperforming a significant majority of competitors. The estimated Total Revenue Growth Rate for the next 3 to 5 years is 9.92%, which is better than 62.22% of companies in the same space. However, the 3-Year and 5-Year EPS without NRI Growth Rates are -37.30% and -56.10%, respectively, indicating that while revenue is growing, profitability is not keeping pace.
Key Shareholders in Twilio
Twilio's shareholder base includes notable names such as Al Gore (Trades, Portfolio), holding 8,638,749 shares (4.77% share percentage), Catherine Wood (Trades, Portfolio) with 7,132,012 shares (3.94% share percentage), and Baillie Gifford (Trades, Portfolio) owning 4,082,621 shares (2.26% share percentage). The involvement of these significant investors could suggest confidence in Twilio's long-term strategy and potential for growth.
Competitive Landscape
When compared to its competitors, Twilio stands out in terms of market capitalization and growth. Zillow Group Inc (ZG, Financial) has a market cap of $12.74 billion, Match Group Inc (MTCH, Financial) is valued at $9.94 billion, and Tencent Music Entertainment Group (TME, Financial) boasts a market cap of $14.71 billion. Twilio's market cap places it comfortably within this range, indicating its competitive stance in the interactive media industry.
Conclusion: Twilio's Current Outlook
In summary, Twilio Inc's stock performance has been a mixed bag, with a recent downturn over the past week but a significant gain over the last three months. The company's business model and industry positioning remain strong, with a high Growth Rank and revenue growth rates that outshine many competitors. However, profitability remains a concern, with several key metrics in the negative. The presence of influential shareholders may provide some stability and optimism for the stock's future. When juxtaposed with its competitors, Twilio's market cap suggests it is holding its own in a competitive landscape. Investors should continue to monitor Twilio's performance, particularly in terms of profitability improvements, to better understand its long-term value proposition.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
