Twilio Inc (NYSE:TWLO) took quite the roller coaster ride after its IPO almost ten months ago. TWLO stock, priced at $15, opened at $24, and closed its first day of trading at $29. By the end of September — barely three months after Twilio stock hit the public markets — TWLO traded above $70. The decline was swift, however. Within six weeks, TWLO stock hit $30, nearly completing a round-trip to its first-day closing price.

Since then, TWLO stock has calmed significantly, and traded in a reasonable range. An upgrade from JPMorgan earlier this month has sparked a small rally in Twilio. But the stock still trades below half the highs reached last year.

I don’t expect TWLO to retake $70 any time soon — but I do see plenty of reason for near-term upside in the stock. With Twilio earnings due in early May, there’s a potential upside catalyst ahead. And from a broader perspective, there are other drivers of what remains a strong growth story.

Twilio’s Performance Is Just Fine

The mini-bubble in TWLO in late 2016 colors the perception of the stock. Somehow, because Twilio stock is about 55% off its highs, it seems disappointing.

That’s not really the case, however. It’s not Twilio’s fault that investors bid up a low-float, high-growth issue soon after its IPO. A secondary offering announced in October certainly didn’t help — but most of the proceeds went to shareholders, not the company itself. And it’s not as if other companies haven’t done the same thing: both Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB), among many others, executed secondaries soon after their public offerings.

If TWLO stock had priced at $15, closed its first day at $23, then risen to $35-$40 before a more modest retreat, TWLO would be considered just another growth stock, not damaged goods. And it’s not as if Twilio’s performance has driven the decline. The company beat estimates in both Q3 and Q4; and Twilio stock gained as a result.

The fact that Twilio stock traded above $70 in October doesn’t impact where Twilio stock is headed going forward. That rise and fall aside, Twilio has performed well — and that performance should continue.

Twilio’s Growth Will Continue

TWLO stock gets almost universal rave reviews from analysts. And it’s not just the analysts involved in the IPO. Smaller shops without investment banking services — and thus the incentive to goose Twilio stock higher — have been positive as well. Those are the same type of firms who have expressed steady skepticism about the Snap Inc (NYSE:SNAP) IPO, largely on valuation concerns.

Analysts aren’t always right, of course. But the backing of the analyst community should help near-term trading, particularly out of earnings reports. Sympathetic analysts get the post-earnings story out the market. And the fact that the Street sees upside for Twilio does matter from a long-term standpoint as well. The average target price for TWLO stock is over $39, representing 20%-plus upside. That’s a major gap for such a well-followed stock.

Meanwhile, Twilio is growing — and should continue to grow. Revenue increased 60% in Q4, and 66% for the full year. The midpoint of 2017 guidance suggests another 33% increase in 2017. The company’s integration with Amazon.com, Inc. (NASDAQ:AMZN) and its Amazon Web Services unit provides a powerful growth driver going forward as well.

Twilio isn’t profitable, admittedly. The issuance of Twilio stock to employees and executives — some $24 million in 2016 alone — needs to be considered as well. But in 2017, the company should near non-GAAP profitability. And the nature of the SaaS model is that upfront near-term losses are booked in order to create high-margin recurring revenue down the line. As long as Twilio can continue its impressive top-line growth, the numbers will work. And with Amazon as a partner, and real need for the company’s CPaaS offerings, that growth should continue.

TWLO Stock Isn’t Cheap — But It’s Not Expensive, Either

Even at half price, Twilio stock is priced dearly, trading at over 6x the midpoint of 2017 revenue guidance on an enterprise basis.

But that’s not terribly out of place in the current software environment. Veeva Systems Inc (NYSE:VEEV) is at almost 10x forward revenue – despite lower current growth and an eventual limit driven by its focus on the life sciences industry. Splunk Inc (NASDAQ:SPLK) trades at a similar revenue multiple to Twilio stock, despite lower growth.

Twilio stock has room to gain even at that high multiple — if revenue growth continues. And, again, there’s little reason to see otherwise at the moment. TWLO stock isn’t cheap — but investors generally have to pay up for quality. And post-IPO trading aside, this looks like a quality stock.

As of this writing, Vince Martin had no positions in any securities mentioned.