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Investing.com - Goldman Sachs has raised its price target on Twilio (NYSE:TWLO) to $150 from its previous target while maintaining a Buy rating following the company’s third-quarter results. This new target represents a 33% upside from the current price of $112.86, aligning with InvestingPro analysis that suggests Twilio is currently undervalued based on its Fair Value assessment.
The company reported revenue that exceeded consensus estimates by 3.7%, with gross margin in line at 50.1%, operating margin 110 basis points above expectations, and free cash flow margin 150 basis points higher than anticipated. Twilio’s stock rose approximately 8% in after-hours trading following the announcement. The company’s last twelve months revenue reached $4.73 billion with a growth rate of 11.56%, while generating an impressive $774.5 million in free cash flow.
Twilio demonstrated stable organic revenue growth of 12.9% and raised its fourth-quarter revenue guidance by 2.3% compared to consensus estimates, citing healthier messaging and voice volumes. The company also increased its fiscal year 2025 outlook for operating income by 5% and free cash flow by 4%. With a strong current ratio of 4.9 and an Altman Z-Score of 4.99, InvestingPro data shows Twilio maintains a GOOD overall financial health rating, making it well-positioned to deliver on its guidance.
Goldman Sachs highlighted Twilio’s voice business as a standout performer, with ConversationRelay call volumes increasing threefold quarter-over-quarter and a tenfold revenue increase from its top 10 voice AI startup customers. The firm believes Twilio is well-positioned to capitalize on voice resurgence with its 390,000+ customer base.
The investment bank views Twilio as an attractive compounding free cash flow story with solid risk-reward at 16.5x EV/FCF for fiscal year 2026, noting that software add-on growth is accelerating while ISV/Self-Serve channels are growing over 20%. Twilio has delivered a 39.94% price return over the past year, outperforming many peers despite trading at an EV/EBITDA of 52.54x. For deeper insights into Twilio’s valuation metrics and growth prospects, explore the comprehensive Pro Research Report available exclusively through InvestingPro.
In other recent news, Twilio Inc. reported impressive third-quarter 2025 financial results, surpassing Wall Street expectations. The company achieved an earnings per share of $1.25, exceeding the forecasted $1.08, and reported revenue of $1.3 billion, which was above the anticipated $1.25 billion. These results highlight Twilio’s strong performance in key financial metrics. In addition, BofA Securities raised its price target for Twilio from $100 to $110, although it maintained an Underperform rating. Meanwhile, Citizens reiterated a Market Outperform rating with a price target of $165, emphasizing Twilio’s comprehensive platform for customer interactions. These updates reflect the company’s position in the customer communications sector. The recent developments indicate that Twilio continues to be a focal point for analysts and investors.
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