The bulls are striking back at Twilio (NYSE: TWLO) these days. Shares of the communications software specialist climbed 10.6% higher last week, fueled by a bullish analyst note from JMP Securities analyst Patrick Walravens.
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Twilio is hot again. The shares have risen in nine of the past 10 trading days, soaring nearly 21% in the process. June is shaping up to be a good month for Twilio investors, and that's not something the bulls should take lightly. The stock has closed lower in six of the eight previous months, peaking shortly after last year's IPO. Twilio's bubbling again, but keeping it that way hasn't been easy.
Twilio's stock is on the rebound, but it's not back to where it was before plunging last month after a poorly received report that revealed a mixed quarter. The provider of in-app communications features did the unforgivable, hosing down its outlook after a key client, Uber, began kicking the tires of rival providers.
Walravens thinks Twilio stock can double between now and 2019, a bold prediction for a stock that's already nearly doubled since going public at $15 a year ago. Walravens' checks indicate that Twilio's core business is strong if not accelerating. Uber may be a near-term drag, but it should eventually stabilize before rebounding. His checks also show that Twilio's new COO -- George Hu, the former Salesforce.com exec who came over in March -- is making some smart moves.
Twilio was already on the move the week before Walravens' bullish update. The company was making the rounds to get its story out, presenting at William Blair's 37th Annual Growth Stock Conference and hosting a management meeting with Oppenheimer on back-to-back days.
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The market's been hot and cold when it comes to Twilio. Wall Street pros see its once torrid top-line growth continuing to decelerate, rising 30% this year and 27% come 2018. However, with its growing list of developers and its starring role in many of the hottest apps, it's also hard to dismiss the stock.
We can't belittle the impact of Uber's move to turn to new in-app options in some territories. Uber was accounting for 17% of its revenue during last year's fourth quarter, and that's down to 12% now. Uber was the reason Twilio hosed down its guidance in early May. However, the fact that it didn't whittle away that forecast even more ahead of its analyst presentations two weeks ago is encouraging.
Things are starting to stabilize here, it seems, and growth investors are warming up to the stock again.
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