EbeneNews – US – TWLO Stock: Recent weakness is an opportunity to buy Twilio

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    The recent selloff in hot tech stocks offers investors a golden opportunity to buy long-term winners at discounted prices, and this is perhaps truer when it comes to Twilio stock (NASDAQ: TWLO)

    Twilio is a long-term winner in the digital economy, with a stock that has been burning all year This fire in the stock was briefly extinguished over the past month But the fundamentals underlying the stock TWLO remain as robust as ever The only thing that has changed is that the stock price has fallen into discount territory

    Welcome to the PLC economy For those who are not familiar, APIs are short for application programming interfaces, and they are essentially small blocks of code that allow seamless communication between different software services

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    Because we are entering an economy where everything is built on software, APIs are becoming more and more critical, so much so that many technologists are saying that we have entered the API economy

    Twilio is a communication API company that is at the heart of this economy The company widely manufactures APIs that enable communication applications, such as messaging and video chat applications

    To sum up, if I’m a business and want to use SMS to communicate with my customers, I’ll use Twilio’s APIs to make sure the message I’m sending is communicated transparently to everyone. of my customers, whatever the software or the version of their phone

    To this end, Twilio is creating the building blocks for modern communication applications The use of these communication applications will skyrocket over the next few years as businesses increasingly embrace hybrid work environments and that brands and consumers will turn more to digital communication channels In this case, the demand for Twilio’s communication APIs will also increase, ensuring the company has huge potential for long-term revenue growth.

    Even more than that, given that Twilio is built on a highly scalable software business model with huge gross margins, Twilio has many avenues to improve its profitability profile over the next few years, moving from margins to ‘operation at 25 today % -more operating margins at large scale

    Strong revenue growth coupled with strong margin expansion equals huge profit growth As you profit, stocks

    It doesn’t take a rocket scientist to connect these dots Strong earnings growth will lead to huge gains in TWLO stock in the long run

    My numbers indicate that TWLO stock does indeed have huge long-term upside potential, based on the company’s earnings growth prospects

    I assume the company can continue to add around 50,000 new customers per year over the next decade and increase its average revenue per user through its expansion into new areas of communication.I’m also taking into account the margin increases that will likely occur as the business grows, given the inherent scalability of the business model

    In this case, my numbers suggest that Twilio has a realistic chance of making $ 15 earnings per share by 2030

    Based on a multiple of 35 futures earnings, which is the average for the application software industry, this equates to a 2029 price target for TWLO stock of $ 525 – more than double of the current price

    Discount of 85% per annum, implying a 2020 price target for TWLO stock of around $ 250

    Don’t overthink this one Buy the dip today Come back in the year TWLO stock price will be much higher Come back in five years, and it will be much, much higher

    At the time of publication, Luke Lango had (neither directly nor indirectly) any position on any of the titles mentioned in this article

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    NYSE: TWLO, Twilio, Stock

    EbeneNews – US – TWLO Stock: Recent weakness is an opportunity to buy Twilio



    SOURCE: https://www.w24news.com/news/ebenenews-us-twlo-stock-recent-weakness-is-an-opportunity-to-buy-twilio/?remotepost=363706

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