Twilio Inc (NYSE:TWLO) has been rallying lately in expectation of a strong quarterly report. But this time around, the Street got things very wrong.
In after-hours trading, TWLO stock is off a grueling 30% to $23.93. That’s just above the 52-week low of $23.66 and well under the high of $70.96. Yes, playing the initial public offering game can be extremely volatile.
Now, the first quarter was not bad. The company posted earnings per share that beat the Street by 2 cents a share and revenues came to $87.4 million, compared to the consensus estimated of $83.60.
Instead, the reason for the plunge in TWLO stock is the guidance. For the current quarter, the company forecasts a loss of 10 cents to 11 cents and revenues ranging from $85.5 million to $87.5 million. The Street estimate, on the other hand, was for an 8 cent loss and revenues of $87.8 million.
The full-year outlook was also a bit light. TWLO is expecting a loss of 27 cents to 30 cents on revenues of $356 million to $362 million for the year. Yet the consensus was for a loss of 16 cents on revenues of $370 million.
Granted, such divergences may seem kind of minor. But then again, TWLO stock sported a frothy price-to-sale ratio of 11X ahead of the earnings. So even a slight change can make a big difference in the valuation for TWLO.
OK, so here are some of the other highlights of the quarter:
- The number of active customer accounts hit 40,696, up from 28,648 on a year-over-year basis.
- TWLO announced the extension of a strategic relationship with Amazon.com, Inc.’s (NASDAQ:AMZN) cloud services.
- The company released Programmable chat, which allows for real-time chat for the web, mobile and desktop.
- There was also the introduction of Programmable Fax.
- TWLO has launched the beta for Notify, which allows for managing notifications in apps like Facebook Inc’s (NASDAQ:FB) Messenger.
Click to Enlarge If Tuesday’s post-market losses stand, TWLO stock will be in deep technical danger.
The company should open around the $24 mark, smashing well below its 50-day moving average around $30.50, putting it near all-time lows at $23.66.