Accelerated digital transformation amid the coronavirus pandemic is benefiting Twilio (TWLO).
The cloud communications Platform-as-a-Service (PaaS) provider continues to witness rising demand for its products from industries like health care, education, retail, and crisis management organizations. The company is currently among the top analysts stocks because of its strong prospects.
Acquisitions Bode Well
Twilio’s commendable efforts to expand its global footprint include making investments in businesses and technologies to serve a broader range of global developers and enterprises. Moreover, strategic acquisitions have helped fortify its product portfolio and expand its global presence.
In July, Twilio acquired toll-free messaging provider Zipwhip, bolstering its messaging business. In March, the company strengthened its presence in the Indian communications market by acquiring communications PaaS firm ValueFirst.
Moreover, the acquisitions of Segment and Sendgrid helped Twilio gain a significant number of customers, aiding the top line meaningfully.
Third-quarter results reflect the contributions of the acquisitions to top-line growth. Notably, Segment brought in $52.3 million, and Zipwhip generated $23.6 million of revenues.
Wall Street Weighs In
Morgan Stanley analyst Meta Marshall reiterated a Buy rating on Twilio with a $420 price target last month.
“Messaging business should continue to be the primary driver of growth in the near term, especially as the company expands internationally, but higher margin opportunities in Engage, Flex, and Segment are ramping and should support longer-term target of 30%+ organic growth,” noted Marshall.
The sentiment of the rest of Wall Street resonates with that of Marshall, with a Strong Buy consensus rating, based on 18 Buys and one Hold. The Twilio stock price prediction of $421.76 indicates an upside of 54.4%.
Disclosure: At the time of publication, Chandrima Sanyal did not have a position in any of the securities mentioned in this article.
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