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Investing.com - Morgan Stanley has raised its price target on Twilio (NYSE:TWLO) to $154.00 from $152.00 while maintaining an Overweight rating on the stock. According to InvestingPro data, this target aligns with analysts’ bullish outlook, with the highest target currently at $170 and Twilio trading below its Fair Value estimate.
The adjustment follows Twilio’s third-quarter organic revenue exceeding guidance by approximately 4.5 percentage points, which Morgan Stanley attributes to broad-based strength across channels and products, with mid-teens growth in voice services and high-teens growth in messaging. This performance continues Twilio’s solid revenue growth trajectory, with InvestingPro data showing 11.56% revenue growth over the last twelve months.
Despite carrier fees continuing to pressure gross margins, Morgan Stanley noted that Twilio’s improvement initiatives and positive mix shift support future stabilization and improvement in this area. InvestingPro shows Twilio’s gross profit margin currently stands at 49.98%, while the company maintains a strong financial position with more cash than debt on its balance sheet.
The firm highlighted strong performance in core drivers, with self-service, ISV, and multi-product customers each growing more than 20% year-over-year, while early AI data points showed AI voice customers increasing 60% year-over-year and top 10 customers growing tenfold. This growth has contributed to Twilio’s impressive 39.94% price return over the past year.
Morgan Stanley expressed increased confidence in Twilio’s ability to execute double-digit growth with margin stabilization and improvement over time, which it believes is underappreciated at the current 15x enterprise value to free cash flow multiple. This assessment is supported by InvestingPro’s overall financial health rating of "GOOD" for Twilio, with analysts predicting the company will be profitable this year. Discover Twilio’s complete financial picture with InvestingPro’s comprehensive Research Report, available for over 1,400 US stocks.
In other recent news, Twilio reported strong third-quarter 2025 earnings, surpassing Wall Street expectations with an earnings per share of $1.25, compared to the forecasted $1.08. The company’s revenue reached $1.3 billion, exceeding the anticipated $1.25 billion. Following these results, Needham raised its price target for Twilio to $145, maintaining a Buy rating, while Goldman Sachs increased its target to $150, also keeping a Buy rating. Both firms highlighted Twilio’s strong Q3 performance as a key factor in their decisions.
Citizens reiterated its Market Outperform rating on Twilio, setting a price target of $165, citing the company’s trusted platform for customer interactions. BofA Securities, however, raised its price target to $110 from $100 but maintained an Underperform rating. The company’s Q3 results exceeded BofA and Street estimates across key metrics, including revenue, adjusted gross profit, non-GAAP operating income, and free cash flow. These developments reflect Twilio’s strong position in the customer communications sector.
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