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Twilio Stock Sinks on Weak Forecast but Analysts Remain Bullish

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The website home screen for Twilio on a smartphone.

Gabby Jones/Bloomberg


 was falling sharply Thursday after the software company said it expected to report a fourth-quarter loss that was wider than analysts’ expectations. 

The stock was dropping 18.2% to $282.86.

Twilio (ticker: TWLO) predicted an adjusted loss in the fourth quarter of 23 cents to 26 cents a share vs. analysts’ estimates that called for a loss of 10 cents.

Revenue was forecast at $760 million to $770 million, above Wall Street estimates of about $745 million.

The company also said Chief Operating Officer George Hu was stepping down. Khozema Shipchandler, chief financial officer, will be adding the operating chief duties.

Analysts at RBC Capital Markets maintained their Outperform rating on the stock and price target of $450 after Twilio reported adjusted third-quarter profit of 1 cent a share, better than forecasts that called for an adjusted loss of 14 cents.

RBC attributed the stock’s decline to a “12-point deceleration in organic revenue growth, limited gross margin upside, and lighter-than-usual guidance.

“In our view, pandemic tailwinds are fading while the re-opening tailwinds are not kicking in fast enough to offset,” RBC said in a note.

RBC said it remains “bullish on the set up for FY22 with ample leversto drive organic growth back towards 30%+.” Twilio’s organic revenue growth in the third quarter was 38%, down from 50% in the second quarter.

Mizuho Securities analysts reiterated their Buy rating on the stock but lowered their price target to $375 from $430 “on near-term pressures and reduction of peer multiples.”

The analysts said they “view Twilio’s growth trajectory as a promising one in 2022 and beyond as the company expands from a communication infrastructure to a customer engagement platform (CRM 3.0) and cloud contact centers.”

Macquarie Research reiterated its Outperform rating on the stock and $513 price target.

Analysts surveyed by FactSet have an average Buy rating on the stock and price target of $443.12.

Write to Joe Woelfel at [email protected]

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