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Investing.com - BofA Securities raised its price target on Twilio (NYSE:TWLO) to $110 from $100 on Friday, while maintaining an Underperform rating on the stock. The new target sits slightly below Twilio’s current trading price of $112.86, though InvestingPro data suggests the stock may be undervalued based on its Fair Value assessment.
The cloud communications platform company reported third-quarter 2025 results that exceeded BofA and Street estimates across key metrics including revenue, adjusted gross profit, non-GAAP operating income, and free cash flow. Twilio has maintained strong financial health with a gross profit margin of nearly 50% and impressive year-over-year revenue growth of 11.56%.
Twilio management raised its fiscal year 2025 guidance across all financial categories, which BofA interpreted as a sign of confidence in the company’s execution capabilities.
The firm noted that Twilio’s adjusted gross profit grew 8.7% year-over-year, lagging behind the 13% organic revenue growth rate. This discrepancy was attributed to adjusted gross margins declining 60 basis points quarter-over-quarter to 50.1%, which BofA explained was due to pass-through carrier A2P fees.
Despite the price target increase reflecting "increasing execution confidence," BofA maintained its Underperform rating, stating it needs more evidence that Twilio will be a long-term market share gainer with its messaging, voice, and customer data value proposition. Investors should note that Twilio has delivered a 39.94% price return over the past year and holds more cash than debt on its balance sheet, though it trades at an extremely high P/E ratio. For deeper insights into Twilio’s financials and 10+ additional ProTips, check out the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Twilio Inc. reported strong financial results for the third quarter of 2025, exceeding Wall Street’s expectations. The company achieved an earnings per share (EPS) of $1.25, surpassing the projected $1.08. Additionally, Twilio’s revenue reached $1.3 billion, outperforming the anticipated $1.25 billion. These figures highlight a period of significant financial performance for the company. Despite the positive earnings and revenue results, Twilio’s stock experienced a slight decline in aftermarket trading. This development comes amid a broader context of investor interest in the company’s financial health and market position. Analyst projections and upgrades or downgrades were not mentioned in the recent reports, focusing primarily on the company’s earnings and revenue achievements.
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