Mizuho reiterates Twilio stock rating at Outperform with $140 price target

Investing.com - Mizuho maintained its Outperform rating and $140 price target on Twilio (NYSE:TWLO) ahead of the company’s third-quarter earnings report, scheduled for October 30. According to InvestingPro analysis, the stock currently appears undervalued, trading at $106.65 with analyst targets ranging from $75 to $170.

The investment firm expressed bullish sentiment despite Twilio shares falling approximately 13% since its second-quarter results, underperforming compared to the Nasdaq-100 index’s 6% gain during the same period. Still, InvestingPro data shows the company maintains strong fundamentals with a healthy current ratio of 4.9 and revenue growth of 11.56% over the last twelve months.

Mizuho anticipates Twilio will deliver solid revenue and operating income that exceed expectations for the third quarter, with the company likely raising its 2025 guidance for both metrics.

The firm expects an operating income guidance increase to demonstrate that recent investments in voice AI and RCS technology do not signal the beginning of a significant investment cycle, and that gross margin pressures won’t prevent Twilio from achieving over 20% compound annual growth rates in operating income and free cash flow through 2027.

Mizuho remains optimistic about Twilio’s multiple growth drivers, noting that voice AI adoption and messaging/voice price increases should provide additional momentum into 2026.

In other recent news, Twilio has announced the global release of new data tools aimed at enhancing customer engagement. These tools include Granular Observability, a centralized Alerting Hub, expanded APIs, and Auto-Instrumentation, which are designed to give businesses improved control over customer data. Additionally, Twilio has made its Rich Communication Services (RCS) messaging available globally, allowing businesses to send branded and interactive messages to their customers.

On the analyst front, Wells Fargo initiated coverage on Twilio with an Overweight rating, highlighting the company’s strong position in AI infrastructure and free cash flow generation. Meanwhile, RBC Capital maintained its Underperform rating but noted Twilio’s potential for double-digit growth due to messaging share gains and AI-enabled voice offerings. Rosenblatt Securities also began coverage with a Buy rating, emphasizing Twilio’s potential for durable profitable growth and significant free cash flow generation. These developments reflect ongoing interest and varied perspectives on Twilio’s future from the investment community.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.