Twilio's Turnaround Story Is Underway, Analyst Turns Bullish And Boosts Price Forecast

Core Viewpoint - Goldman Sachs analyst upgraded Twilio Inc from Neutral to Buy, raising the price target from $77 to $185 ahead of its fourth-quarter earnings results, indicating a turning point in both narrative and financial performance for the company [1] Group 1: Factors Driving Optimism - The analyst's optimism is based on improved go-to-market strategies, clear product innovation, and strong financial discipline [2] - Anticipated positive revisions to both revenue and earnings, with conservative CY25 guidance of 7-8% growth, and expected acceleration to over 10% in the second half of fiscal 2024 [2] Group 2: Revenue Growth Potential - The company needs to exceed its initial CY25 revenue growth forecast of 7-8% to unlock significant upside, as the stock has surged 89% over the last 12 months [3] - Analyst Day highlighted faster product development and enhanced go-to-market strategies, reinforcing the evolving outlook on Twilio [3] Group 3: Market Position and Future Outlook - Improvements to Twilio's Communications portfolio are expected to solidify its leadership in the core CPaaS market, while new CDP-powered Communications products expand its total addressable market [4] - The ongoing turnaround is projected to yield solid upside potential for revenue and free cash flow growth in CY25, making the stock attractive at a 21x EV/FCF multiple for CY26 [4] Group 4: Current Stock Performance - TWLO shares are trading higher by 2.6% at $139.77 [5]