Shares of Twilio (TWLO) has risen an astounding 14.33% or $36 per share on Friday’s mid day trading session. It seems that the stock has attracted investor interest in the beginning of this month.
What happened to Twilio (TWLO)?
Following the cloud-computing company’s analyst day where the company pledged 30% or higher annual growth over the next four years. Twilio shares surged 9.2% to $280.67 in early trading. Cowen analyst J. Derrick Wood, who has an outperform rating and hiked his price target to $350 from $310, said the forecast was “quite impressive” and insinuated about $5 billion in revenue by 2024.
The rather terse statement read simply, “Twilio Inc. (the “Company”) announces that it preliminarily expects that the Company’s total revenue for the quarter ended September 30, 2020 will be ahead of the Company’s previously issued guidance of $401 million to $406 million.” That brief missive sent Twilio’s stock soaring, gaining nearly 10% in after-hours trading.
Companies will regularly provide forward-looking guidance, which is nothing more than management’s informed estimate of how the company will perform in the coming quarter. It isn’t unusual for business to be more brisk than expected, causing the company to exceed its own guidance.
A brief look at Twilio’s results shows that it exceeded management’s guidance in three of the past four quarters. In fact, during the first and second quarters of 2020, Twilio’s total revenue exceeded management’s forecast by 8% and 8.3%, respectively. In neither of those cases did Twilio submit a filing with the SEC that it expected to exceed its guidance.
Is Twilio (TWLO) a good investment?
Shares of Twilio (TWLO) appear to be a very good investment option, the Money Midnight Indicator is expecting its price to increase considerably in the next several years. The majority of the metrics point to this investment being highly attractive.