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Why Twilio (TWLO) Dipped More Than Broader Market Today

Twilio (TWLO) closed at $57.55 in the latest trading session, marking a -1.49% move from the prior day. The stock's change was less than the S&P 500's daily loss of 0.88%. On the other hand, the Dow registered a gain of 0.56%, and the technology-centric Nasdaq decreased by 2.05%.

The company's shares have seen a decrease of 5.07% over the last month, not keeping up with the Computer and Technology sector's loss of 3.33% and the S&P 500's loss of 2.57%.

Investors will be eagerly watching for the performance of Twilio in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on May 7, 2024. The company is expected to report EPS of $0.60, up 27.66% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.03 billion, up 2.31% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $2.71 per share and revenue of $4.37 billion, which would represent changes of +10.61% and +5.17%, respectively, from the prior year.

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It is also important to note the recent changes to analyst estimates for Twilio. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. At present, Twilio boasts a Zacks Rank of #2 (Buy).

Looking at its valuation, Twilio is holding a Forward P/E ratio of 21.59. This valuation marks a discount compared to its industry's average Forward P/E of 27.78.

One should further note that TWLO currently holds a PEG ratio of 1.1. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Internet - Software industry currently had an average PEG ratio of 1.72 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 53, positioning it in the top 22% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow TWLO in the coming trading sessions, be sure to utilize Zacks.com.

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