The bullish case for Twilio stock: ‘notification galore’

CEO Karen Firestone of Aureus Asset Management sat with CNBC to share her view on Twilio Inc (NYSE: TWLO) after the stock gained 11% this week. On “Halftime Report”, she said:

“Just like we’re not through with ransomware, we are not through with getting notifications about everything – from when you can go pick up your dog at the vet to when you can go into your dentist. I mean, there are notifications galore – used to be Uber, Lyft, and airlines. And that was what Twilio was, the backbone of all of that communication to clients, and now it’s just everything, and that’s a mushrooming category.”

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In separate news, Sinch acquired MessageMedia for $1.3 billion (£940 million) last week to compete with Twilio in business SMS services.

Firestone says Twilio stock is on a run again

Firestone highlighted that Twilio rallied to a high of $443 per share in mid-February. As the broader market took a hit, the stock tanked to a low of $281 per share in mid-May. Expressing confidence in Twilio as a software company, she said that the stock is now on a run again.

“The Fed’s message was relatively benign that investors, who had been shying away from these stocks because of the fear of inflation and higher interest rates which means you have to use a higher discount rate when you do a valuation of what this stock is worth that isn’t going to earn money for a few years, they feel relieved,” Firestone said.

Twilio’s revenue jumped 62% in the fiscal first quarter

In May, Twilio said that its quarterly revenue jumped 62% on a year-over-year basis to $590 million. GAAP loss from operations in the first quarter stood at $197.3 million versus the year-ago figure of $92.7 million.

The cloud communications platform had more than 235,000 active customer accounts by the end of Q1 – a significant increase from 190,000 in the same quarter of the previous year. Twilio partnered with Syniverse in March aimed at innovation in mobile communications.

Twilio opened at $359 per share on Friday and is currently exchanging hands at $366 per share. In comparison, it had started the year at a lower $334 per share. The NYSE-listed company performed massively upbeat in the stock market last year with an annual gain of more than 200%. At the time of writing, it has a market cap of $63 billion.