Twilio (TWLO) Stock Sinks As Market Gains: Here's Why

Zacks
02-05

In the latest trading session, Twilio (TWLO) closed at $145.92, marking a -0.44% move from the previous day. This change lagged the S&P 500's 0.72% gain on the day. Elsewhere, the Dow saw an upswing of 0.3%, while the tech-heavy Nasdaq appreciated by 1.35%.

The company's stock has climbed by 29.7% in the past month, exceeding the Computer and Technology sector's loss of 1.35% and the S&P 500's gain of 1.02%.

Investors will be eagerly watching for the performance of Twilio in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on February 13, 2025. In that report, analysts expect Twilio to post earnings of $1.02 per share. This would mark year-over-year growth of 18.6%. Meanwhile, our latest consensus estimate is calling for revenue of $1.17 billion, up 8.99% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for Twilio. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 15.43% higher. Twilio is currently a Zacks Rank #1 (Strong Buy).

In terms of valuation, Twilio is currently trading at a Forward P/E ratio of 33.8. This expresses a premium compared to the average Forward P/E of 31.46 of its industry.

We can additionally observe that TWLO currently boasts a PEG ratio of 1.16. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 2.27.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 66, which puts it in the top 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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