Canaccord On Twilio's Q4: Not Much For Shorts To Complain About

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.

Related Links:

Twilio Q4 Earnings Preview

After Twilio's Rocky Year, Analyst Suggests Investors With High Risk Tolerance Revisit The Stock

Posted In: Canaccord GenuityRichard DavisUberAnalyst ColorPrice TargetReiterationAnalyst Ratings