Twilio (TWLO) stock soared out of the gate Friday after the cloud communications company announced its financial targets for fiscal years 2025 to 2027 at its Investor Day.
Among the financial targets Twilio provided in its presentation was achieving a 21% to 22% adjusted operating margin for fiscal year 2027, well ahead of analysts' expectations of 19.7%, and generating $3 billion in free cash flow from 2025 to 2027, ahead of expectations of $2.8 billion, according to CNBC.
"If we execute well in 2025, I think we write our own story from 2026 on," CEO Khozema Shipchandler told CNBC.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Twilio also provided its guidance for fiscal year 2025 in the presentation. It expects to achieve revenue growth in the range of 7% to 8%, $825 million to $850 million in operating profit and $825 million to $850 in free cash flow. The revenue forecast arrived in line with analysts' expectations, while operating profit and free cash flow came in ahead of the $814 million and $808 million, respectively, that Wall Street is anticipating.
Here's Kiplinger contributor Will Ashworth explaining why free cash flow is such an important metric for investors to track: "If a company generates more cash than it needs to run its business, it can do a number of useful things with it, such as pay dividends, buy back its stock, acquire other companies, expand its business and knock out its debts."
Is Twilio stock a buy, sell or hold?
Wall Street is bullish on the tech stock. According to S&P Global Market Intelligence, the average recommendation among the 31 analysts following the stock that it tracks is a Buy.
However, analysts' price targets have had a tough time keeping up with TWLO's surging stock price.
Indeed, the large-cap stock is up more than 22% today, pushing its year-to-date gain to over 27%. The average analyst price target of $117.20 represents a discount of more than 15% to current levels.
Financial services firm Oppenheimer is one of the more bullish outfits on TWLO stock with an Outperform rating (equivalent to a Buy) and a $160 price target.
"We come away from Twilio's Investor Day positive on its direction and more confident in its ability to accelerate growth," says Oppenheimer analyst Ittai Kidron.
"While management's vision isn't completely new," the analyst wrote, "its actions (integration of Segment with communications, more automation, AI [artificial intelligence] enhancements, organizational realignment) are bringing the vision to reality, at a time when the need for an efficient and compelling omnichannel customer and contextually enhanced experience is rising."
Related Content
-
Should You Do A Roth IRA Conversion? Nine Things to ConsiderThe Tax Letter Thinking of converting a traditional IRA to a Roth IRA? The Kiplinger Tax Letter Editor highlights nine factors you should consider before making a move.
-
33 Stocks That Could Rally 50% or More This YearAnalysts say these S&P 500 stocks have at least 50% price upside over the next year or so.
-
33 Stocks That Could Rally 50% or More This Year
Analysts say these S&P 500 stocks have at least 50% price upside over the next year or so.
-
Stock Market Today: Dow Drops 971 Points as Powell Pressure Ramps UpPresident Trump is increasing his attacks against Jerome Powell, insisting the Fed chair cut interest rates.
-
When Should You Hand Over the Keys — to Your Investments?The secret to retirement planning? "The best time to hand over the keys is before you’ve realized you need to hand over the keys."
-
Going to College? How to Navigate the Financial PlanningCollege decisions this year seem even more complex than usual, including determining whether a school is a 'financial fit.' Here's how to find your way.
-
Financial Steps After a Loved One's Alzheimer's DiagnosisIt's important to move fast on legal safeguards, estate planning and more while your loved one still has the capacity to make decisions.
-
How Soon Can You Walk Away After Selling Your Business?You may earn more money from the sale of your business if you stay to help with the transition to new management. The question is, do you need to?
-
Two Don'ts and Four Dos During Trump's Trade WarThe financial rules have changed now that tariffs have disrupted the markets and created economic uncertainty. What can you do? (And what shouldn't you do?)
-
I'm Single, With No Kids: Why Do I Need an Estate Plan?Unless you have a plan in place, guess who might be making all the decisions about your prized possessions, or even your health care: a court.
