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Twilio Inc. (TWLO) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Twilio Inc. (TWLO) closed the most recent trading day at $119.02, moving -1.1% from the previous trading session. This change lagged the S&P 500's daily loss of 0.15%. Elsewhere, the Dow gained 0.11%, while the tech-heavy Nasdaq lost 0.24%.

Prior to today's trading, shares of the company had gained 21.74% over the past month. This has outpaced the Computer and Technology sector's gain of 7.03% and the S&P 500's gain of 3.88% in that time.

TWLO will be looking to display strength as it nears its next earnings release. On that day, TWLO is projected to report earnings of $0.01 per share, which would represent a year-over-year decline of 75%. Meanwhile, our latest consensus estimate is calling for revenue of $312.07 million, up 52.75% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for TWLO. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. TWLO currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, TWLO is holding a Forward P/E ratio of 575.54. Its industry sports an average Forward P/E of 57.54, so we one might conclude that TWLO is trading at a premium comparatively.

We can also see that TWLO currently has a PEG ratio of 44.93. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry currently had an average PEG ratio of 2.54 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 109, which puts it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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