Fannie Mae, Freddie Mac shares tumble after conservatorship comments
On Friday, Goldman Sachs analyst Kash Rangan adjusted the price target for Twilio stock (NYSE:TWLO), currently trading at $97.88 with a market capitalization of $14.94 billion, increasing it from $130.00 to $145.00, while reiterating a Buy rating on the shares. According to InvestingPro analysis, the stock appears slightly undervalued based on its proprietary Fair Value model. The adjustment comes after Twilio reported first-quarter results that exceeded market expectations, with revenue surpassing consensus estimates by 3%, operating margin (OpM) outperforming by 170 basis points, and free cash flow (FCF) beating forecasts by 53%.
Twilio’s shares showed a significant rise, indicated to be up 9% in after-hours trading, following the announcement of their third consecutive quarter of accelerating double-digit revenue growth at 12%. The company also provided second-quarter revenue guidance that was 1.3% higher than consensus and slightly raised its full-year 2025 guidance to 8% growth from the previously stated 7.5%.
Goldman Sachs’ positive stance is supported by Twilio’s solid performance across several strategic areas including Independent (LON:IOG) Software (ETR:SOWGn) Vendor (ISV) partnerships, self-service platforms, cross-selling, and international expansion. Moreover, the Segment division of Twilio delivered its best dollar-based net expansion rate (DBNER) in the past five quarters at 94% and returned to positive growth at 1%. InvestingPro data reveals the company maintains excellent financial health with a score of 3.0 (GREAT) and impressive liquidity metrics, including a current ratio of 4.2.
The firm’s second-quarter guidance anticipates a 9.5% growth rate, which Goldman Sachs views as a reasonable baseline. This outlook is bolstered by recent go-to-market enablement on product cross-selling, continued momentum in artificial intelligence (AI)—highlighted by a new customer acquisition in Sierra during the first quarter, which adds to their portfolio of over 9,000 AI customers—and a partnership with ElevenLabs for ConversationRelay. Additionally, Twilio’s growth is further evidenced by a 37% increase in customers contributing more than $500,000.
In conclusion, Goldman Sachs believes that Twilio’s recent results and forward-looking guidance affirm the investment firm’s thesis that Twilio has reached an inflection point in both narrative and fundamentals, with promising upside potential for revenue and free cash flow in the fiscal year 2025 and beyond. This assessment is made with consideration of Twilio’s valuation metrics, which include an EV/EBITDA multiple of 79.05x. For deeper insights into Twilio’s valuation and access to 12 additional exclusive ProTips, including detailed analysis of the company’s growth prospects and financial health, visit InvestingPro, where you’ll find comprehensive Pro Research Reports covering what really matters for smarter investing decisions.
In other recent news, Twilio Inc. reported impressive financial results for the first quarter of 2025, surpassing both earnings and revenue expectations. The company achieved an earnings per share of $1.14, which exceeded the forecasted $0.96, and reported revenue of $1.17 billion, surpassing the anticipated $1.14 billion. Twilio also announced a 12% year-over-year increase in revenue and a record non-GAAP income from operations of $213 million, marking a 34% increase from the previous year. The company has provided guidance for the second quarter, projecting revenue between $1.18 billion and $1.19 billion, suggesting a 9-10% year-over-year growth.
Additionally, Twilio launched new AI-driven products and announced a significant share repurchase program, reflecting its strategic focus on innovation and shareholder value. Analyst firms such as Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC) Securities have shown interest in Twilio’s growth drivers, particularly in the communications segment and AI advancements. Despite potential macroeconomic pressures, Twilio’s leadership remains optimistic, with CEO Khozema Shipchandler emphasizing the company’s focus on AI and voice technologies as areas for sustainable growth. The company is also eyeing potential future acquisitions to bolster its strategic initiatives.
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