Twilio (TWLO) Stock Sinks As Market Gains: What You Should Know

Twilio (TWLO) closed at $117.32 in the latest trading session, marking a -3.43% move from the prior day. This move lagged the S&P 500's daily gain of 0.28%. Meanwhile, the Dow gained 0.43%, and the Nasdaq, a tech-heavy index, added 0.09%.

Coming into today, shares of the company had gained 2.79% in the past month. In that same time, the Computer and Technology sector gained 6.2%, while the S&P 500 gained 4.37%.

Investors will be eagerly watching for the performance of Twilio in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.02, indicating a 17.24% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.19 billion, up 9.48% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.49 per share and revenue of $4.81 billion. These totals would mark changes of +22.34% and +7.85%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Twilio. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. As of now, Twilio holds a Zacks Rank of #3 (Hold).

In the context of valuation, Twilio is at present trading with a Forward P/E ratio of 27.04. This expresses a discount compared to the average Forward P/E of 29.03 of its industry.

Investors should also note that TWLO has a PEG ratio of 1.38 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 2.24.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 62, which puts it in the top 26% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Twilio Inc. (TWLO) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research