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
-
10 Cities Where Grocery Prices Are HighestThese 10 cities are paying up to 33% more than the rest of the country to keep food on the table.
-
Amid Mounting Uncertainty: Five Forecasts About AIThe Kiplinger Letter With the risk of overspending on AI data centers hotly debated, here are some forecasts about AI that we can make with some confidence.
-
Here's How to Plan This Year's Roth Conversion, From a Wealth ManagerWhile time is running out to make Roth conversions before the end of the taxable year, consider taking your time and developing a long-term strategy.
-
Four Times You Need a Second Opinion on Your Financial PlanIs your financial plan fit for purpose — or is your adviser peddling an outdated strategy? When you see these red flags, it's time for a second opinion.Evan
-
'But It's Not My Fault!': Your Insurance Company Absolutely Will Blame You in These Five ScenariosInsurance companies care about 'fault' in more ways than you think — from payment mishaps to your neighbor's landscaping — so it's on you to manage the risks.
-
Dow Dives 797 Points as Government Opens: Stock Market TodayThe process of pricing and re-pricing realities old and new never stops, and next week promises to be at least as exciting as this week.
-
5 Core Stocks Every Investor Should Own In 2026 and BeyondCore stocks are solid, long-term investments that provide stable returns and steady growth within your portfolio. Here are five we like.
-
How to Calm Your Retirement Nerves When It's Time to Shift from Savings Mode to Spending ModeTransitioning from saving to spending in retirement can be tricky, but devising a strategic plan can help ensure a smooth and worry-free retirement.
-
Why Wills and Trusts Aren't Enough in the Great Wealth Transfer, From an Attorney Who KnowsFamilies need to prepare heirs through communication and financial know-how, or all that money could end up causing confusion, conflict and costly mistakes.
-
Private Markets for Main Street: What Financial Advisers' Clients Need to KnowWith product innovation 'democratizing' private market access for everyday investors, advisers must step up their game to educate clients on the pros and cons.
