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Why Twilio's Shares Popped 11% in January

By Chris Neiger - Updated Feb 13, 2018 at 7:07PM

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Investors may have been convinced of the company's upside following an analyst's recommendation.

What happened

Shares of Twilio, Inc. (TWLO -13.51%) jumped 11.2% last month, according to data from S&P Global Market Intelligence, probably on the news that Summit Redstone Partners said the company's stock was a buy and set its price target at $36.

So what

Twilio's shares have been pretty volatile since last year, when the company's stock experienced a long series of dips and pops before ending the year down 18%.

Stock chart with line graphs on top of them.

Image source: Getty Images.

That's why investors were probably pleased to see Summit Redstone Partners' Jonathan Kees initiate coverage of the company in January and place a "buy" rating on Twilio's stock.

"As the company approaches consistent profitability and cash generation in 2018 in our model, we believe that investors will start valuing other non-growth attributes," Kees wrote.  

In addition to the analysts' recommendation, Twilio's shares may also have benefited from general optimism in the stock market, as the S&P 500 gained 5.6% last month.

Now what

Twilio's shares have continued to climb in February, mainly because the company just reported a strong fourth quarter, with revenue growth of 41% and an earnings loss per share of $0.03. Analysts were expecting a loss of $0.06. It's still early in the year of course, but Twilio is getting 2018 off to a great start.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool recommends Twilio. The Motley Fool has a disclosure policy.

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