Please ensure Javascript is enabled for purposes of website accessibility

Why Twilio Stock Popped Today

By Steve Symington - Nov 26, 2018 at 6:01PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The cloud communications platform company climbed along with the broader market and a vote of confidence from Wall Street.

What happened

Shares of Twilio (TWLO 1.75%) jumped as much as 10.2% early Monday, then settled to close up 8.4% thanks to a combination of the broader market's gains and an encouraging analyst note.

On the former, major market indices notched broad-based gains today, including a nearly 2.1% rise from the tech-heavy Nasdaq Composite. Considering stocks just capped a difficult week in which the Nasdaq lost more than 4%, it's no surprise to see high-flying names like Twilio rebounding harder than most.

Twilio red text logo with circle around four dots

IMAGE SOURCE: TWILIO.

So what

Likely fueling Twilio's fire, however, was a positive note that came early in Friday's abbreviated session from Oppenheimer analyst Ittai Kidron, who reiterated his "outperform" rating and $110 per-share price target on the cloud communications platform leader -- representing a more than 25% premium even after today's rise.

To justify his continued bullishness, Kidron argued there's "strong upside potential" from Twilio's impending acquisition of SendGrid. Keeping in mind that Twilio shares plunged after the all-stock deal was announced last month, Kidron noted that Twilio's recently filed proxy documents reveal that not only were SendGrid's forecasts above consensus estimates, but also that the equity agreement was ultimately accepted "as offering superior value" to four previous cash offers after Twilio shared its own better-than-expected internal forecasts. 

Now what

To be clear, Twilio has already more than tripled so far in 2018. But after combining the recent momentum created by Twilio's exceptional third-quarter report earlier this month, the expected synergies and rationale behind the acquisition, and Kidron's insight from Twilio's recent proxy filings, it seems he isn't exactly going out on a limb with his glowing endorsement of the stock. If Twilio can sustain that momentum and follow through as planned with the SendGrid purchase, I suspect investors will see many more all-time highs in the years ahead.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Twilio Inc. Stock Quote
Twilio Inc.
TWLO
$99.12 (1.75%) $1.71
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$11,607.62 (3.34%) $375.43
Oppenheimer Holdings Inc. Stock Quote
Oppenheimer Holdings Inc.
OPY
$35.49 (3.86%) $1.32
SendGrid Stock Quote
SendGrid
SEND

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.