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Twilio (NYSE:TWLO) has had a “fall from grace” over the past few years, as it reaped the benefits from the COVID-19 pandemic and subsequent decline but investment firm Monness, Crespi, Hardt is looking for the company to get back on track with its fourth-quarter results.
Analyst Brian White, who has a neutral rating on Twilio (TWLO), noted that the stock fell 91% from its peak in February 2021 to its trough in November 2022, due to the aforementioned bump and fall from the pandemic, but also misplaced priorities, an acquisition spree that has been described as “excessive” and a lack of spending discipline.
“In our view, the focus, discipline, and innovative spirit that rocketed Twilio onto the next-gen software scene has faded in recent years,” White wrote.
While that may be tough to get back from, the company is trying, White noted, as evidenced by the fact it removed its organic annual revenue growth target of 30% at its November investor day. Instead, the company is now focused on achieving adjusted operating profitability in 2023 and is looking to generate between 15% and 25% organic annual revenue growth over the next three to five years.
In addition to tweaking its organic growth rate at its investor day, Twilio (TWLO) also raised the size of its total addressable market to $116B in 2025 from $80B in 2022.
For the fourth-quarter, White expects Twilio (TWLO) to generate $1.02B in revenue, up 21% year-over-year, while losing an adjusted 5 cents per share.
Analysts expect Twilio (TWLO) to lose an adjusted 8 cents per share on $1B in revenue.
