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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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
-
Market Fees Could Be Costing You — Here’s How to Avoid ThemSome money market accounts charge more than they earn. Here's how to spot costly fees and choose smarter savings options.
-
The Role of a Mortgage Underwriter in Buying a HomeFrom fast-track approvals to manual reviews, here’s what to expect (and how to avoid delays) in the underwriting process.
-
Alphabet Stock Pops After Google Antitrust Ruling: What to KnowGOOGL stock is soaring Wednesday after a judge ruled that Alphabet does not have to divest its Chrome browser.
-
7 Mistakes to Avoid When You First Start InvestingInvesting brings the opportunity to build wealth, but there are plenty of mistakes that can be made. Here are seven common ones and how they can be avoided.
-
A Fidelity Fund Misses Out on Soaring Bank StocksThe Fidelity International Growth Fund has outperformed over the long term, but its lagging exposure to bank stocks has weighed on more recent returns.
-
More Than Money: The Hidden Toll of Financial Abuse of Older AdultsFinancial abuse from schemes involving tech support, government impostors, false sweepstakes, grandchild hoaxes and online shopping issues can cause thousands of dollars in losses.
-
I'm a Financial Planner: Here Are Three High-Impact Ways to Make a Difference With Your DollarsThe world often feels out of control, but here are three ways to use your money — through investments, charitable giving and political donations — to help create a more just and sustainable future.
-
Stocks Slide to Start September: Stock Market TodaySeasonal trends suggest tough times for the stock market as we round into the end of the third quarter.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
Where is the Foreign Dividend Boom Headed?It's been a golden six months for foreign dividend stocks, but can any be relied on for predictable income going forward? Here are some options.
