Twilio INC

Twilio Inc (TWLO) Market Cap = $61.774 Billion 1 Year Performance = 248.1346% Social Media sentiment = 24% Business summary Twilio Inc. offers Cloud Communications Platform, which enables developers to build, scale and operate real-time communications within software applications. The Company's platform consists of Programmable Communications Cloud, Super Network and Business Model for Innovators. Its Programmable Communications Cloud software enables developers to embed voice, messaging, video and authentication capabilities into their applications through its Application Programming Interfaces (APIs). Its Programmable Communications Cloud offers building blocks that enable its customers to build what they need. Its Programmable Communications Cloud includes Programmable Voice, Programmable Messaging, Programmable Video and Use Case APIs. The Super Network is its software layer that allows its customers' software to communicate with connected devices globally. It interconnects with communications networks around the world. Analysis Strengths: Necessity of product for businesses - Twilio allows businesses to bridge the gap between the internet and the traditional communications networks for a very competitive price. If a business wishes to establish a company phone system (PBX) or a call centre they require a large amount of additional infrastructure. This includes specialized servers, software, facilities and staff to maintain the system. Twilio can set up the desired infrastructure cheaper and quicker than a businesses would most likely be able to do themselves. It is often an obvious choice to employ a company such as Twilio to do this work. Makes automated sms messages easy - The company provides an easy way to automate sms messages to recipients and automate replies. This service is actually more popular than you may initially think, you have probably even used it at some point. Interacting with Twilio's platform is far easier than interacting with expensive and costly world of telecommunications. TwiML - Twilio has designed a custom language, Twilio Markup Language. This allows developers easy access to write programs for their respective desires in a language very similar to HTML and XML, two well known languages. This allows developers to apply their skills to build software without requiring them to learn multiple different, lesser-known languages. Weaknesses: Organization structure - Currently the company's corporate structure is only compatible with the current business model. This means that if the company wished to expand into adjacent product segments it would most likely require some sort of restructure which limits the mobility of the business. New entrants - More recently formed businesses pursuing specific niches within the segment has meant that Twilio has lost a small amount of market share in these categories. The company has build internal feedback systems into the sales team in order to try and counter this threat. General competition - Twilio is underperforming with respect to key competitors in terms of profitability and investment in research and development. This is despite spending more than the industry average on R&D. Opportunities: Plenty of firms still need to transition - The globe is becoming evermore interconnected day by day. There are still many firms either growing to the point where they would need to use Twilio or choosing to transition online, there are plenty of new customers for the company everyday. Availability of credit - Historically low rates mean that for many businesses taking loans is not really a problem, especially in order to invest in key business infrastructure such as what Twilio can provide for them. Threats: Reactionary not innovative - Twilio seems to have a policy of reaction to competitors rather than pursuing its own new products. It is hard to say why this is, although as the company spends more than the industry average on R&D it could be that this area of the business is not particularly effective. That being said the products that they make in response to competitors are good. Lack of regularity with product releases - Twilio does not appear to release products with any particular schedule which can lead to high and low swings in revenue over time. Prices of raw materials - steady increase in commodity prices has impacted the profitability of Twilio as other technology related commodities, such as silicone, experience periods of scarcity the firm may find its costs of production increase. Analysts Thoughts Twilio's revenue is forecast to increase by a mean 38.42% in FY1, 30.75% in FY2 and 28.30% in FY3. Analysts seem to believe that the company can maintain a relatively fast rate of revenue growth over the next few years. Analysts also provide a mean price target of 512.83 USD which represents a 25% upside from the current price. Recently Morgan Stanley updated their price target to $500 from $370. TLDR Twilio provides key infrastructure and services to businesses looking to link the internet with the telephony network. Despite a few smaller competitors eating away at the fringes of the company's market share there do not appear to be many immediate threats to the company that would prevent it continue its growth.

back
default-avatar-4

teaheat

Feb 24, 2021

-15.38%

Change % Since Posting

417.00

Price When Posted

-64.13

Change Since Posting

TWLO

Twilio Inc Class A

352.87

0.00
0.00%
Current Price

Twilio INC

bullish
Twilio Inc (TWLO)
  • Market Cap = $61.774 Billion

  • 1 Year Performance = 248.1346%

  • Social Media sentiment = 24%

Business summary

Twilio Inc. offers Cloud Communications Platform, which enables developers to build, scale and operate real-time communications within software applications. The Company's platform consists of Programmable Communications Cloud, Super Network and Business Model for Innovators. Its Programmable Communications Cloud software enables developers to embed voice, messaging, video and authentication capabilities into their applications through its Application Programming Interfaces (APIs). Its Programmable Communications Cloud offers building blocks that enable its customers to build what they need. Its Programmable Communications Cloud includes Programmable Voice, Programmable Messaging, Programmable Video and Use Case APIs. The Super Network is its software layer that allows its customers' software to communicate with connected devices globally. It interconnects with communications networks around the world.

Analysis

Strengths:

  • Necessity of product for businesses - Twilio allows businesses to bridge the gap between the internet and the traditional communications networks for a very competitive price. If a business wishes to establish a company phone system (PBX) or a call centre they require a large amount of additional infrastructure. This includes specialized servers, software, facilities and staff to maintain the system. Twilio can set up the desired infrastructure cheaper and quicker than a businesses would most likely be able to do themselves. It is often an obvious choice to employ a company such as Twilio to do this work.

  • Makes automated sms messages easy - The company provides an easy way to automate sms messages to recipients and automate replies. This service is actually more popular than you may initially think, you have probably even used it at some point. Interacting with Twilio's platform is far easier than interacting with expensive and costly world of telecommunications.

  • TwiML - Twilio has designed a custom language, Twilio Markup Language. This allows developers easy access to write programs for their respective desires in a language very similar to HTML and XML, two well known languages. This allows developers to apply their skills to build software without requiring them to learn multiple different, lesser-known languages.

Weaknesses:

  • Organization structure - Currently the company's corporate structure is only compatible with the current business model. This means that if the company wished to expand into adjacent product segments it would most likely require some sort of restructure which limits the mobility of the business.

  • New entrants - More recently formed businesses pursuing specific niches within the segment has meant that Twilio has lost a small amount of market share in these categories. The company has build internal feedback systems into the sales team in order to try and counter this threat.

  • General competition - Twilio is underperforming with respect to key competitors in terms of profitability and investment in research and development. This is despite spending more than the industry average on R&D.

Opportunities:

  • Plenty of firms still need to transition - The globe is becoming evermore interconnected day by day. There are still many firms either growing to the point where they would need to use Twilio or choosing to transition online, there are plenty of new customers for the company everyday.

  • Availability of credit - Historically low rates mean that for many businesses taking loans is not really a problem, especially in order to invest in key business infrastructure such as what Twilio can provide for them.

Threats:

  • Reactionary not innovative - Twilio seems to have a policy of reaction to competitors rather than pursuing its own new products. It is hard to say why this is, although as the company spends more than the industry average on R&D it could be that this area of the business is not particularly effective. That being said the products that they make in response to competitors are good.

  • Lack of regularity with product releases - Twilio does not appear to release products with any particular schedule which can lead to high and low swings in revenue over time.

  • Prices of raw materials - steady increase in commodity prices has impacted the profitability of Twilio as other technology related commodities, such as silicone, experience periods of scarcity the firm may find its costs of production increase.

Analysts Thoughts

Twilio's revenue is forecast to increase by a mean 38.42% in FY1, 30.75% in FY2 and 28.30% in FY3. Analysts seem to believe that the company can maintain a relatively fast rate of revenue growth over the next few years.

Analysts also provide a mean price target of 512.83 USD which represents a 25% upside from the current price. Recently Morgan Stanley updated their price target to $500 from $370.

 

TLDR

Twilio provides key infrastructure and services to businesses looking to link the internet with the telephony network. Despite a few smaller competitors eating away at the fringes of the company's market share there do not appear to be many immediate threats to the company that would prevent it continue its growth.

Comments

Write your comment....

Sign in to comment

read-time
4 min

458.70

Target Price

9/ 10

Confidence

6-12 Months

Timeframe
catalyst icon
Earnings Release
catalyst icon
News
catalyst icon
SEC Filing
catalyst icon
Sentiment
catalyst icon
Other Catalyst

TWLO Channel

Start new chat
next