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On Friday, Piper Sandler adjusted its outlook on Twilio shares (NYSE:TWLO), raising the price target to $161 from the previous $142 while maintaining an Overweight rating. The firm's analyst cited Twilio's full fourth-quarter 2024 results, which aligned with expectations set during a positive preannouncement at the analyst day a few weeks prior. This optimism aligns with broader analyst sentiment, as InvestingPro data shows 14 analysts have recently revised their earnings estimates upward, with price targets ranging from $60 to $185. The analyst highlighted that the growth is primarily driven by customer expansion and noted that the Gross Profit Margin (GPM) and Net Revenue Retention (NRR) rates for Segment appear to be stable.
The first-quarter guidance provided by Twilio suggests a better setup for the future, potentially indicating another quarter of accelerating growth. Despite the anticipation of the fourth-quarter results being a "non-event" due to the earlier analyst day insights, Piper Sandler's investment thesis remains firm. The thesis continues to focus on free cash flow, higher sustainable growth, contributions from Independent (LON:IOG) Software (ETR:SOWGn) Vendors (ISVs), and cross-selling opportunities.
Furthermore, Piper Sandler plans to feature Twilio management in an upcoming roadshow on the east coast and will host the company at the Enterprise Connect event. The analyst reiterated Twilio as the top Communications pick, reflecting confidence in the company's strategy and market position.
The raised price target and maintained Overweight rating reflect Piper Sandler's positive outlook on Twilio's financial performance and growth prospects. Twilio's recent quarterly results and forward-looking guidance have reinforced the research firm's favorable stance on the stock.
In other recent news, Twilio has been the focus of various analyst firms following the release of its fourth-quarter earnings. Stifel has raised its price target for Twilio to $135, maintaining a Hold rating. The company's fourth-quarter results were slightly below market expectations, but Stifel analysts highlighted the potential for Twilio's top-line growth, particularly from the application of AI in customer engagement workflows.
Similarly, Bernstein SocGen Group increased its price target for Twilio to $119 while keeping a Market Perform rating. The adjustment followed Twilio's Q4 2024 earnings report, which demonstrated an 11% year-over-year revenue growth increase. Despite the anticipated slight decline in growth for Q1 2025, Bernstein analysts expect Twilio to achieve just over 10% growth, based on an improving economy and the potential stabilization of the Segment business.
William Blair maintained an Outperform rating on Twilio shares, highlighting the company's solid fourth-quarter performance with an 11% revenue increase. The firm noted Twilio's consistent improvement in organic revenue growth and the potential for margin expansion.
Bernstein also noted that the buzz around Deepseek, a new AI tool, could benefit software vendors like Twilio. The firm suggested that lower costs could drive higher demand for AI applications, favoring companies providing software infrastructure.
Lastly, Needham raised its price target on Twilio to $165, reiterating a Buy rating. The firm noted Twilio's updated medium-term financial targets, recent advancements in AI, and preliminary results for the fourth quarter as key drivers for the company's growth. These recent developments suggest a promising growth narrative for Twilio.
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