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Investing.com -- Twilio surged sharply in premarket trading Friday after the company announced on Analyst Day that it expects adjusted earnings to come in at the top range of guidance for the fourth quarter and unveiled positive guidance for the next couple of years through 2027.
Twilio Inc (NYSE:TWLO) leaped more than 19% in the premarket trade.
The company said it expects adjusted earnings for Q4 at the top end of guidance on revenue growth for Q4 of about 11%. Twilio previously said it expects adjusted EPS in the range of $0.95 to $1.00 for Q4. Analysts expect Q4 EPS to come in at about $1.00, and revenue growth of 7.9%.
In separate update at its investor day event, the company also unveiled its three-year framework. For 2025, the company is expecting free cash flow (FCF) in a range of $825M to $850M on 7% to 8% revenue growth year over year.
Looking further ahead to 2027, Twilio is targeting an adjusted operating margin increasing between 21% and 22%, above Visible Alpha’s 19.68% consensus.
The company also unveiled a $2 billion share buyback program.
Following the announcement, Morgan Stanley (NYSE:MS) analysts lifted their price target on the stock to $144 from $118.
"Twilio's Analyst Day accomplished the task for laying out the multiple levers for growth they have in the newly labeled "CXaaS" market," analysts led by Meta (NASDAQ:META) A. Marshall noted.
"Raising price target as profitability commitment and prelim Q4 results were better than expected. There remain multiple levers for upside as they execute on the plan laid out," they added.
Baird analysts also shared bullish comments.
"We attended TWLO's investor day and driven by the pre-released Q4 upside and broad-based strength, came away more confident in the company's ability to continue to drive double-digit revenue growth and further upside to guidance and estimates."
"We also view valuation as still reasonable, particularly given potential upside scenarios," they added, hiking the price target on the stock to $160 from $115.
Yasin Ebrahim contributed to this report.