The deflation of the Twilio Inc (NYSE:TWLO) IPO has certainly been stunning. The company pulled off its offering in June at $15 a share and within a few months, the price hit a nose-bleed $69. But then there was an avalanche of selling with Twilio stock. As of now, the price is at $31.
Despite all this, TWLO has continued to grow at a rapid pace. In the latest quarter, the revenues jumped by 60% to $82 million, as the number of active customer accounts went from 34,457 to 36,606.
In fact, Twilio beat the Street consensus. The company also forecasted that the growth ramp would continue throughout the year.
But it was not enough to get TWLO stock back into gear. For the most part, Twilio stock has been trading in a tight range.
So might there be an opportunity? Perhaps TWLO stock has bottomed out and is poised for a move on the upside? Well, to see, let’s take a look at three pros and three cons:
Three Pros to Twilio Stock
Powerful Platform: TWLO has a suite of powerful cloud-based applications, allowing for SMS, chat, voice calling and video. A developer can easily embed this technology into an app, providing access to a sophisticated communications network.
The business model is also enticing. That is, payments are only required when there is usage of the Twilio service.
As a result, the company has been able to quickly attract developers. Note that there are over 1 million accounts.
Going Upmarket: TWLO has an Enterprise Plan, which is focused on large customers that have tough requirements for compliance, security and administration. A key part of this was the recent granting of ISO 27001 certification, which is a global standard for security.
While still in the early stages, the Enterprise Plan is showing encouraging results. For example, in the latest quarter TWLO snagged a major airline as well as Capital One Financial Corp. (NYSE:COF) and the Blue Cross Blue Shield companies.
According to CEO Jeff Lawson, on the most recent earnings call: “We are seeing really good response in terms of the enterprise. Again, I would say this is our developer first model at play where developers are the ones bringing Twilio into the enterprise just like they’ve brought us into a number of different types of technology first companies.”
Growth Opportunity: Companies like Uber, Alphabet Inc (NASDAQ:GOOG,NASDAQ:GOOGL) and Amazon.com, Inc. (NASDAQ:AMZN) have raised the bar when it comes to apps and cloud technologies. Customers have come to expect that they can get quick service with just a few taps.
This is where TWLO is so powerful. The company’s systems can easily allow for must-have features to remain competitive.
So in light of this, it should be no surprise that the market opportunity for Twilio stock is enormous. According to research from IDC, it’s estimated at about $45.4 billion.