Twilio (TWLO) Beats Market Returns: Some Facts to Consider

During the last trading session, Twilio (TWLO) closed at $55.44, up +1.15% from the previous day. The stock’s change was higher than the S&P 500’s daily gain of 0.09%. Meanwhile, the Dow Jones lost 0.1% and the tech-heavy Nasdaq added 0.16%.

The company’s shares are down 7.18% over the past month, trailing the Computer and Technology sector’s gain of 4.06% and the S&P 500’s gain of 2.83%.

Analysts and investors will be closely watching Twilio’s performance when it next releases its earnings. The company’s earnings per share (EPS) are expected to be $0.71, reflecting an increase of 31.48% compared to the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $1.06 billion, up 1.68% from the year-ago quarter.

For the full year, the Zacks Consensus Estimate is earnings of $3.10 per share and revenue of $4.35 billion, demonstrating changes of +26.53% and +4.73 %, respectively, compared to the previous year.

Investors should also note any recent changes to analyst estimates for Twilio. These recent revisions tend to reflect the evolving nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Based on our research, we believe these estimate revisions are directly related to stock movements near the team. To take advantage of this, we have constructed the Zacks Rank, a proprietary model that takes these estimated changes into account and provides an operational rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive, externally audited track record of outperformance, with #1 ranked stocks generating an average annual return of +25% since 1988. Over the past 30 days, our consensus EPS projection has remained stagnant. Currently, Twilio has a Zacks Rank of #3 (Hold).

As for valuation, Twilio is currently trading at a forward P/E ratio of 17.69. This indicates a discount from its industry’s forward P/E of 29.68.

Investors should also note that TWLO currently has a PEG ratio of 0.54. The PEG ratio is similar to the widely used price-to-earnings ratio, but this metric also takes into account the company’s expected earnings growth rate. The Internet – Software industry currently had an average PEG ratio of 1.63 as of yesterday’s close.

The Internet – Software industry is part of the Computer and Technology sector. This industry, currently sporting a Zacks Rank of 74, is in the top 30% of all 250+ industries.

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

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

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