27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
JMP Securities maintained its Market Perform rating on Twilio Inc (NYSE: TWLO) after the company disclosed in its Form 10-Q about the drop in the amount of revenue received from its largest customer, WhatsApp, through the first half of 2016.
The revenue from WhatsApp, owned by Facebook Inc (NASDAQ: FB), fell to $6.0 million in the second quarter of 2016 from $8.9 million in the first quarter of 2016. Of note, the contribution from WhatsApp to the total revenue is declining as it accounted for 9 percent of revenue in the second quarter from 15 percent in the first quarter.
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Analyst Patrick Walravens views the development as a positive one due to the following factors:
- 1) "WhatsApp's use case is unique in that it leverages a multi-vendor strategy and funnels traffic to vendors based on an algorithm—in addition, it is our understanding that Twilio has granted WhatsApp a separate, complex rate structure that varies by geography, among other things"
- 2) "The WhatsApp revenue is classified as "variable" by management because WhatsApp has declined to enter into a contract with a minimum revenue commitment, making it less predictable and riskier, as evidenced by the drop in 2Q16"
- 3) "Twilio has suggested investors focus on its "base" revenue, which grew 84% y/y in 2Q16 and which we estimate will grow 67% in 2016 and 39% in 2017, while variable revenue will shrink 12% in 2016 and 62% in 2017 in our model"
- 4) "As the variable revenue becomes smaller and base revenue more closely approximates total revenue, the story becomes cleaner and simpler to understand, in our opinion."
The analyst expects variable revenue (consisting mostly of WhatsApp) will represent 10 percent of revenue in 2016, falling to 3 percent in 2017, and 2 percent in 2018.
Walravens projects 2016 non-GAAP EPS of ($0.28), ($0.07) for 2017 and non-GAAP EPS of $0.08 for 2018.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.