The software company Twilio received a positive recommendation from Bank of America
Bank of America analysts have updated their recommendation on the shares of software company Twilio Inc. (TWLO). A few weeks before, other analysts had issued similar guidance. It is noteworthy that Twilio has lost almost 50% in the last 12 months. According to Bank of America analysts, Twilio can become an even bigger business by 2024.
Against this background, analysts have recommended “buying” shares at a target price of $ 250. For comparison, Goldman Sachs made the same recommendation a month earlier, but their target price is $350. Bank of America calls Twilio a pioneer and leader in communication platforms (CPaaS) services. As this new market expands, Twilio will deliver sustained revenue growth of more than 30% for more than five years.
By 2024, the annual sales volume of Twilio could more than double compared to the current sales volume of $2.6 billion. However, despite the revenue growth, Twilio remains unprofitable. As a result, the company has lost $839 million in free cash flow. At the same time, Bank of America’s recommendations does not predict whether Twilio will reach profitability by 2024; the forecast of S&P Global Market Intelligence, the software company, will begin to profit under GAAP no earlier than 2025.
Twilio has been known as a communication platform provider as a service (CPaaS) for more than ten years. The company creates application programming interfaces (APIs), which are code fragments that other developers can insert into their base code to access specific tools. The APIs from Twilio help developers easily create communication products in their applications, such as SMS messaging, video and voice calls, real-time streaming, and email. In recent years, Twilio has been expanding its portfolio of services, including through acquisitions.
A software vendor has acquired Segment, a company that owns a customer data platform (CDP), which helps companies manage information, mainly for marketing.
