20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
Although Twilio Inc (NYSE: TWLO) has a superior growth and margin profile, its stock is already trading at a premium valuation, JPMorgan’s Mark R Murphy said in a report. He initiated coverage of the company with a Neutral rating and a price target of $39.
“Twilio is a disruptive cloud-based leader in Communications-Platform-as-a-Service (CPaaS),” analyst Mark Murphy wrote.
Riding The App Wave
Cloud computing is growing strongly, with developers increasingly opting for vendors like Amazon.com, Inc’s (NASDAQ: AMZN) AWS to build software.
Murphy commented that Twilio had achieved for communications what AWS had achieved for compute and storage. He added that Twilio presented investors a “rare opportunity” to gain exposure to the only pure-play PaaS provider that was addressing a large segment of the Communications Software market; and that this market was expected to expand to $45.6B in 2017, according to IDC estimates.
Superior Growth And Margin Profile
Twilio enjoys the best growth and margin profile in the software space, with 88 percent y/y revenue growth in 2015, with -19 percent GAAP operating margin. “While Twilio’s gross margins are structurally constrained by carrier costs, we believe that the vendor’s relatively low S&M spend (28% of 2015 revenue) reflects its highly viral developer-centric self-service model,” the JPMorgan report stated.
The analyst pointed out, however, that the current valuation prices Twilio among “the most expensive Software names,” and already reflects the company’s best-in-class platform and ecosystem as well as superior growth and margin profile.
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20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
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