Goldman Sachs analysts cut Twilio’s (NYSE:TWLO) target price by $38 on April 15 to $262. If you own TWLO stock, the good news is that they still believe there’s plenty of upside for the communication platform-as-a-service (CPaaS) leader. It’s got a buy rating on the stock.
While investors can argue that most should stay away from this falling knife, the professionals at Goldman Sachs (NYSE:GS) believe there is light at the end of the tunnel.
If you’re an aggressive investor, now is the perfect time to consider buying TWLO stock. Trading within 5% of its 52-week low, Twilio hasn’t traded this low since April 2020.
It’s never good when an analyst cuts the target price on a stock they’re covering. However, it’s much worse when they also cut the stock from a buy or overweight rating to a hold or lower. That’s a double kick in the groin.
However, of the 34 analysts covering Twilio stock, 29 rate it a buy, including Goldman Sachs. The five other analysts rate TWLO as either overweight or hold. That’s an overwhelming consensus buy.
The average and median target prices are $300 and $324.18. Both of those are significantly higher than its current share price. The most encouraging aspect of Wall Street’s coverage is the 20-cent profit in fiscal 2023, up from 19 cents a month ago.
Investors might not like Twilio now, but the pros are still sticking by it. And so they should.
Twilio recently reported that the digital transformation of companies accelerated by almost seven years during the pandemic. Further, companies that invested in digital customer engagement products like the kind Twilio offers through their Customer Engagement Platform saw their revenues increase by 70%.
In fiscal 2021, Twilio’s revenues grew by 61% to $2.84 billion. It finished the year with 256,000 active customer accounts, 15.8% higher than a year earlier. In addition, its international revenue accounted for 34% of its sales, 700 basis points higher than 2020.
No, it’s not making money on a GAAP basis, but it could be by the end of 2023. So, long-term investors with an aggressive streak should be looking to buy at current prices. So say the analysts.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
