Twilio Inc TWLO reported better-than-expected fourth-quarter results after Tuesday's market close, leaving little to no ammunition for shorts to hold on to, according to Canaccord Genuity.
The Analyst
Canaccord Genuity's Richard Davis maintains a Buy rating on Twilio's stock with an unchanged $38 price target.
The Thesis
Twilio's positioning is "much better than the ardent bears would lead you to believe," Davis said in a Tuesday note. The analyst named his three main takeaways from the report:
- Growth in the "bread-and-butter" customer remains robust.
- Management's guidance ahead of expectations implies a "set up for upside."
- A management refresh is well-positioned to lead the company through its "next leg of its go-to-market evolution."
Investors are encouraged to buy Twilio's stock before the bottom half of 2018, Davis said. At that point, margins are likely to move higher and year-over-year comparisons will ease as the company lapses its setback with Uber.
"We'd be inching into the stock here, but for those who opt more for a wait-and-see, we wouldn't hold out much later than this summer, as that's likely when others will reach our conclusion."
Price Action
Shares of Twilio were up nearly 18 percent midday Wednesday.
After Twilio's Rocky Year, Analyst Suggests Investors With High Risk Tolerance Revisit The Stock
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