Even after an impressive 20% surge on Friday, Goldman Sachs sees even more potential for Twilio’s stock. The firm has upgraded its rating from neutral to buy, with analyst Kash Rangan boosting the price target significantly from $77 to $185 per share. This suggests an impressive 35.8% increase could be on the horizon from Friday’s closing price.
Twilio, a leader in cloud communications, saw a remarkable leap, the largest since 2020, as the week closed. This was sparked by the company upping its growth forecasts during an analyst event. Twilio laid out ambitious plans to tighten its belt on costs and generate $3 billion in free cash flow over the next three years, a significant increase compared to the $692 million expected for 2022 through 2024.
Kash Rangan highlighted in a research note on Sunday that Twilio seems to be at a transformative point, both in its market narrative and its financial fundamentals. Despite the recent strong performance of the stock, Rangan believes there’s still room for growth, bolstered by optimistic revenue forecasts and advancements in generative AI.
“The turnaround for Twilio is gathering momentum, and there’s strong potential for increased revenue and free cash flow by 2025,” Rangan explained, adding that the current stock level presents a compelling opportunity for entry.
In January alone, Twilio’s shares have risen 26%, and over the past year, they’ve seen an astounding gain of 89.5%. As for analysts’ opinions, they remain divided. According to LSEG, out of 31 analysts covering Twilio, 18 recommend buying or strongly buying the stock, while 13 suggest holding or underperforming.
Adding to the bullish sentiment, Baird also upgraded their rating on the stock last week, labeling it as outperforming and predicting about 40% upside potential.
