Twilio stock plunge on earnings, but fundamentals are strong

Twilio stock price slid slightly despite reporting stronger than expected results for the third quarter. The shares of the customer engagement platform fell amid trader’s concerns over guidance for wider than expected loss for the final quarter this year.
However, the analysts are looking at the long-term fundamentals; they believe larger than expected losses are only due to the company’s aggressive growth strategy. Besides the fourth-quarter loss, the customer engagement platform has generated robust numbers for the third quarter.

In addition, the latest Segment acquisition has enhanced its future fundamentals as the acquisition alone will address $79 billion of the market.

Twilio outperformed estimates in the third quarter

Twilio stock price topped third-quarter revenue estimate by $40 million and quarterly revenue jumped 52% from the past year period. The company ended the quarter with close to 208,000 active customer accounts, representing a growth of 21% year-over-year.
“Great digital engagement is becoming more critical to differentiate the customer experience, and companies across industries and around the world are choosing Twilio’s customer engagement platform to build these solutions,” said Jeff Lawson, Twilio’s co-founder, and CEO.
The co-founder of the customer engagement platform says we provide all three things that companies need these days: digital communications, software agility, and cloud-scale.
The company expects fourth-quarter revenue growth in the range of 37% year over year while the loss per shares is guided around $0.08 compared to the estimate for a loss of $0.02 per share

Analysts see more upside for Twilio stock

Twilio stock price fell more than 7% from the 52-weeks high of $340 that it had hit this month. The share sell-off is a buying opportunity for long-term investors. This is because analysts are bullish over its future fundamentals.
RBC has provided a $375 price target for Twilio stock, with a buy rating. The firm is optimistic about Segment acquisition. Rosenblatt Securities has also set buy ratings for the customer engagement platform.