Twilio stock (NYSE:TWLO) dropped on Monday after Jefferies downgraded the cloud communications software provider, citing “continued headwinds” to the company’s growth in the near future and a low belief that it will grow revenue at a 30% or higher rate.
Analyst Samad Samana downgraded Twilio (NYSE:TWLO) from buy to hold and lowered his price objective from $110 to $50, pointing out that the outlook is no longer as promising as it once was, particularly in light of a poor analyst day.
Samana stated in a note to clients that “Twilio successfully selling the software solutions in its portfolio has been a significant element of our thesis that has not materialized.” The analyst also noted that the segment’s revenue growth has slowed, and recent measures to enhance it may succeed, but improvement is likely to be gradual.
Furthermore, Samana continued, “we feel that demand for front-office software and contact center solutions has slowed more generally, which we expect to have an impact on demand for Twilio’s software solutions portfolio as well.” In early trade, Twilio stock (NYSE:TWLO) decreased by 1.7% to $47.76.
Samana also noted that there has been a downturn in consumer activity, that tighter marketing budgets could result in slower messaging activity, and that macro headwinds and company-specific challenges are likely to result in slower growth.
Because of this, it’s likely that Twilio’s (NYSE:TWLO) growth will be slowed down in the short term by layoffs and the need to hire new sales reps. Twilio (TWLO) started a healthcare and life sciences sector earlier this month to improve how patients feel and how well they feel.
Twilio Stock Analysis
On Twilio, analysts are generally cautious (NYSE:TWLO). Both Wall Street analysts and Seeking Alpha authors have given it a BUY rating. The Seeking Alpha quant algorithm, which usually does better than the market, says that TWLO is a HOLD.
Twilio (NYSE:TWLO) is one of the stocks that Zacks.com users have been following the most recently. So, it might be a good idea to look at some of the factors that could change how well the stock does in the near future.
Compared to the +3.1% change in the Zacks S&P 500 composite, this company’s shares have returned -35.2% over the past month. During this time, Twilio’s industry, Zacks Internet – Software, has dropped 16.5%. Where might the stock be heading in the near future? That is now the crucial question.
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