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William Blair: Twilio Off To A Great Start As Public Company

William Blair has maintained its Outperform rating on Twilio Inc TWLO 0.12% following the company's strong second quarter results and upbeat guidance.

Twilio's revenue rose 70 percent to $64.5 million, $6.3 million above consensus expectations, and non-GAAP loss per share was $0.08, well above the Street's estimate of $0.15.

Twilio saw strong demand across all of its product lines during the quarter, including voice, messaging, and two-way authentication.

Related Link: Big Beat For Twilio: JMP's Patrick Walravens Touts Its Defining Characteristic

"We estimate voice and messaging make up the majority of total revenue, and messaging is growing at a faster clip than the overall business," analyst Bhavan Suri wrote in a note.

Twilio issued full year 2016 revenue guidance of $253 million to $257 million (52 to 54 percent growth), which came in above the Street mean of $242.5 million (45 percent growth). Suri raised his estimate to $255.2 million (53 percent growth) from $240.6 million.

The company expects 2016 non-GAAP loss per share between $0.28 and $0.30. Consensus expectations were $0.36. The analyst narrowed his loss per share estimate to $0.31 from $0.38.

"We expect Twilio to sustain 30%-plus top-line growth for the next few years, and the company is expected to reach non-GAAP operating profitability by the fourth quarter of 2017," Suri noted.

Further, Suri's Buy thesis is centered on the company's above-average growth rate, leading market position, attractive industry dynamics, and effective self-service, usage-based business model.

Jul 2016JP MorganInitiates Coverage onNeutral
Jul 2016Goldman SachsInitiates Coverage onNeutral
Jul 2016William BlairInitiates Coverage onOutperform

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