Shares of Twilio (NYSE: TWLO) skyrocketed 19.7% last month, according to data provided by S&P Global Market Intelligence, after JMP Securities analyst Patrick Walravens published a positive investor note about the company.
Continue Reading Below
Twilio makes software that allows companies to easily add in-app communications to their services. For example, Uber uses Twilio to allow drivers and riders to communicate with each other without having to exchange phone numbers. Other big clients include Facebook's WhatsApp and Airbnb.
The company's huge share price bump came last month after Walravens said that the company's share price will double between now and 2019. Twilio's stock was already climbing on its own before then, but the prediction sent the company's share price spiking even more.
Twilio investors have been a fickle bunch over the past past few months, so it's not all that surprising that stock price skyrocketed on just one bullish investor note. Last month, the company's share price fell by nearly 26% after the company said Uber will rely less on Twilio's services than it has in the past. That news caused Twilio's management to decrease its sales forecast for the full year, and it set off a mini panic among its investors.
Twilio has managed to beat analysts' earnings estimates for five straight quarters, and it still has a very strong customer base (even if Uber is reducing its reliance on the company).
The company expects second-quarter revenue to be between $85.5 million to $87.7 million, and for full-year revenue to be $359 million at the midpoint. The full-year revenue forecasts are slightly lower than previously expected because of Uber's decision, but they still represent about 30% year-over-year growth.
Investors should expect more volatility from the company for the foreseeable future. The company is still in growth mode, and investors have already proved that any news -- whether good or bad -- can put its share price in a tizzy.
10 stocks we like better than TwilioWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now...and Twilio wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of July 6, 2017.