For Immediate ReleasesChicago, IL – February 12, 2025 – Zacks.com announces the list of stocks and ETFs featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Twilio Inc. (TWLO) and Alphabet Inc. (GOOGL) .Here are highlights from Wednesday’s Analyst Blog:High-Flying Twilio a Must-Buy Ahead of Q4 EarningsTwilio Inc., a leading provider of cloud communications Platfor ...

Core Viewpoint - Twilio Inc. is expected to report strong fourth-quarter results for 2024, with projected revenue growth of approximately 11% year-over-year and non-GAAP earnings anticipated to exceed previous guidance, indicating a positive outlook for the company [2][3]. Financial Performance - Fourth-quarter revenue is projected at $1.17 billion, reflecting a 9% increase from the previous year [2]. - Non-GAAP earnings are expected to be above the prior guidance of 95 cents to $1 per share, with a consensus estimate of $1.02 per share, representing an 18.6% year-over-year growth [3]. - The earnings estimates have been revised upward in the past 30 days, indicating positive sentiment among analysts [3]. Earnings Expectations - Twilio has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 31% [5]. - The Earnings ESP (Expected Surprise Prediction) stands at +3.28%, suggesting a strong likelihood of an earnings beat this season [7]. Business Drivers - The fourth-quarter results are likely to benefit from ongoing digital transformation efforts among enterprises, as well as Twilio's initiatives to expand its network with independent software vendors and global partners [8]. - New product introductions, such as enhancements to the Segment platform and AI integrations, are expected to attract more customers [9][10]. - The company added approximately 8,000 new clients in the last reported quarter, bringing the total active customer count to over 320,000 [10]. Cost Management - Twilio's bottom line is expected to benefit from cost-saving measures, including workforce reductions and office closures, with employee count decreasing from 6,428 to 5,535 year-over-year [11]. Stock Performance - Over the past year, Twilio's shares have increased by 102.7%, significantly outperforming the Zacks Internet – Software industry and the S&P 500 index, which grew by 27.7% and 20.9%, respectively [12]. - The stock is currently trading at a forward 12-month price-to-sales (P/S) ratio of 4.61, compared to the industry average of 3.31, indicating a premium valuation [14]. Competitive Position - Twilio is recognized as a leader in the customer engagement and communications space, providing programmable communications cloud software that is widely used by major companies [17]. - The company's developer-friendly platform and extensive API ecosystem enhance its competitive edge, allowing for customizable communication solutions across more than 180 countries [18]. - Twilio is integrating AI-driven features into its platform, which is expected to enhance customer experiences and operational efficiency [19]. Future Outlook - Twilio's leadership in customer engagement, combined with its AI innovations, positions the company well for future growth in a competitive landscape [20].

Core Viewpoint - The article discusses the investment position of Parkev Tatevosian, CFA, and mentions the involvement of The Motley Fool with Twilio, highlighting their recommendation and potential compensation structure [1] Group 1 - Parkev Tatevosian has no position in any of the stocks mentioned [1] - The Motley Fool has positions in and recommends Twilio [1] - The Motley Fool has a disclosure policy regarding its investment recommendations [1]

Core Viewpoint - Twilio Inc. is set to report its fourth-quarter 2024 earnings on February 13, with a strong Zacks Rank 1 and an Earnings ESP of +3.28%, indicating potential for an earnings beat [1][12]. Group 1: Company Performance and Strategy - Twilio has benefited from accelerated digital transformations and a growing hybrid working trend, enhancing its product portfolio through selective acquisitions and strategic investments [3]. - The company is gaining traction from both existing clients and new customers, driven by a focus on product introduction and a go-to-market sales strategy [4]. - Demand for Twilio's programmable voice and messaging products is strong, contributing positively to its top-line performance [5]. Group 2: Financial Outlook - The Zacks Consensus Estimate for fourth-quarter 2024 indicates revenues of $1.17 billion, a 9% year-over-year increase, and earnings per share (EPS) of $1.02, reflecting an 18.6% year-over-year growth [12]. - For 2024, the Zacks Consensus Estimate suggests a year-over-year increase of 6.8% in revenues and 50.6% in EPS, with further upside projected for 2025 [13]. Group 3: Long-Term Growth Catalysts - Twilio is focusing on generative AI to enhance customer engagement, having launched Customer AI technology in June 2023 [8]. - The integration of generative AI capabilities across its platform is expected to drive long-term revenue growth [10]. - The company has a strong balance sheet with $2.7 billion in cash and marketable securities, allowing for strategic acquisitions and growth investments [16].

Core Viewpoint - The market anticipates Twilio (TWLO) to report a year-over-year increase in earnings driven by higher revenues in its upcoming earnings report for the quarter ended December 2024 [1][2]. Earnings Expectations - Twilio is expected to post quarterly earnings of $1.02 per share, reflecting an 18.6% increase year-over-year [3]. - Revenues are projected to reach $1.17 billion, which is a 9% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [4]. - The Most Accurate Estimate for Twilio is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +3.28% [10]. Zacks Rank and Predictive Power - Twilio currently holds a Zacks Rank of 1 (Strong Buy), suggesting a high likelihood of beating the consensus EPS estimate [11]. - A positive Earnings ESP combined with a strong Zacks Rank historically leads to a positive surprise nearly 70% of the time [8]. Historical Performance - In the last reported quarter, Twilio exceeded the expected earnings of $0.87 per share by delivering $1.02, resulting in a surprise of +17.24% [12]. - Over the past four quarters, Twilio has consistently beaten consensus EPS estimates [13]. Industry Context - In the Zacks Internet - Software industry, Rapid7 (RPD) is expected to report earnings of $0.50 per share, indicating a year-over-year decline of 30.6% [17]. - Rapid7's revenue is projected to be $212.25 million, reflecting a 3.4% increase from the previous year [17]. - The consensus EPS estimate for Rapid7 has been revised 1% lower in the last 30 days, resulting in a negative Earnings ESP of -0.40% [18].

Core Viewpoint - Twilio's stock has surged 148% in the past six months, driven by the growing adoption of artificial intelligence (AI) and its potential impact on the company's business [1][2]. Group 1: Company Performance - Twilio's stock rally began in October 2024 after the company reported strong results and better-than-expected guidance [2]. - In Q3 2024, Twilio's revenue increased by 10% year-over-year to $1.13 billion, with more customers and increased spending from existing customers, aided by AI [7]. - Preliminary Q4 2024 numbers indicate an 11% year-over-year revenue increase, surpassing guidance expectations [12]. Group 2: Market Potential - Twilio operates in the communications platform-as-a-service (CPaaS) market, which has seen a slowdown in 2023 but is expected to benefit from AI [5][6]. - The total addressable market for Twilio is projected to reach $158 billion by 2028, with $39 billion attributed to AI-based opportunities [8]. - As of Q3 2024, 9,000 of Twilio's 320,000 active customer accounts were building AI applications on its platform, contributing $260 million in trailing-12-month revenue from AI solutions [9]. Group 3: Growth Opportunities - The number of active customer accounts purchasing add-on products increased by 16% year-over-year in Q3 2024, indicating strong demand for AI solutions [11]. - Twilio's management anticipates a non-GAAP operating margin of 21% to 22%, up from 16% in the previous quarter, suggesting robust bottom-line growth [14]. - The company forecasts cumulative free cash flow of $3 billion over the next three years, a significant increase from the $692 million generated in the past three years [15]. Group 4: Valuation and Investment Considerations - Twilio's current price-to-sales ratio is 5.4, and its forward earnings multiple is 32, with earnings expected to jump by 50% in 2024 [16]. - The stock's remarkable rally appears sustainable, making it an attractive option for investors looking for AI-related investments [16].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, with the aim of buying high and selling higher, capitalizing on established price directions [1] Company Overview: Twilio (TWLO) - Twilio currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting a favorable outlook compared to the market [3] Price Performance - Over the past week, Twilio shares have increased by 21.7%, significantly outperforming the Zacks Internet - Software industry, which rose by 1.86% [5] - In a longer timeframe, Twilio's shares have risen by 27.96% over the past month, compared to the industry's 2.24% [5] - For the last quarter, Twilio shares increased by 58.85%, and over the past year, they gained 86.34%, while the S&P 500 only moved 3.88% and 24.54%, respectively [6] Trading Volume - The average 20-day trading volume for Twilio is 2,908,114 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, 4 earnings estimates for Twilio have been revised upwards, while 1 has been revised downwards, leading to an increase in the consensus estimate from $3.64 to $3.68 [9] - For the next fiscal year, 3 estimates have moved up, with 1 downward revision during the same period [9] Conclusion - Given the strong momentum indicators and positive earnings outlook, Twilio is positioned as a 1 (Strong Buy) stock with a Momentum Score of A, making it a compelling option for investors seeking short-term gains [11]

Core Viewpoint - Twilio (TWLO) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often adjust their valuations based on changes in earnings estimates, leading to significant buying or selling actions that affect stock prices [4]. Twilio's Earnings Outlook - For the fiscal year ending December 2024, Twilio is expected to earn $3.68 per share, reflecting a 50.2% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Twilio has risen by 32.7%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Twilio's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for price appreciation in the near term [10].

Core Insights - Wall Street analysts' recommendations significantly influence investors' decisions regarding Twilio (TWLO) stock, with an average brokerage recommendation (ABR) of 2.00 indicating a "Buy" rating [2][4] - The ABR is based on 27 brokerage firms, with 14 "Strong Buy" and 2 "Buy" recommendations, accounting for 51.9% and 7.4% of total recommendations respectively [2] Brokerage Recommendations - The ABR suggests a positive outlook for Twilio, but relying solely on this information may not be advisable due to the historical ineffectiveness of brokerage recommendations in predicting stock price appreciation [4][9] - Brokerage analysts often exhibit a bias towards positive ratings due to their firms' vested interests, leading to a disproportionate number of favorable recommendations compared to negative ones [5][9] Zacks Rank Comparison - Zacks Rank, a proprietary stock rating tool, categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell) and is based on earnings estimate revisions, which have shown a strong correlation with stock price movements [7][10] - The Zacks Rank is more timely and reliable than the ABR, as it reflects the latest earnings estimates and trends, while the ABR may not be up-to-date [11] Twilio's Earnings Outlook - The Zacks Consensus Estimate for Twilio's current year earnings has increased by 8.4% over the past month to $3.68, indicating growing analyst optimism [12] - This increase in earnings estimates has contributed to Twilio receiving a Zacks Rank 1 (Strong Buy), suggesting a favorable investment opportunity [13]

Company Performance - Twilio's shares have increased by 28% over the past month, reaching a new 52-week high of $142.31 [1] - The stock has gained 28.6% year-to-date, compared to 30.3% for the Zacks Computer and Technology sector and 44.6% for the Zacks Internet - Software industry [1] Earnings and Revenue Expectations - Twilio has a strong record of positive earnings surprises, not missing earnings consensus estimates in the last four quarters [2] - In the latest earnings report on October 30, 2024, Twilio reported EPS of $1.02, exceeding the consensus estimate of $0.87 [2] - For the current fiscal year, Twilio is expected to post earnings of $4.24 per share on revenues of $4.43 billion, with a year-over-year change of 15.27% [3] - For the next fiscal year, earnings are projected to be $4.74 per share on revenues of $4.76 billion, representing a year-over-year change of 7.51% [3] Valuation Metrics - Twilio currently trades at 32.8X current fiscal year EPS estimates, which is above the peer industry average of 31.2X [7] - On a trailing cash flow basis, Twilio trades at 170X compared to the peer group's average of 26.2X [7] - The stock has a PEG ratio of 1.12, indicating it is not in the top echelon from a value perspective [7] Zacks Rank and Style Scores - Twilio has a Zacks Rank of 1 (Strong Buy) due to rising earnings estimates, which is favorable for investors [8] - The company has a Value Score of F, while its Growth and Momentum Scores are both A, resulting in a VGM Score of B [6] Industry Comparison - The Internet - Software industry is in the top 18% of all industries, providing favorable conditions for both Twilio and its peers [11] - Fortinet, a peer company, has a Zacks Rank of 2 (Buy) and has shown strong earnings performance, beating consensus estimates by 23.53% [9][10]