What happened

Shares of Twilio (TWLO 1.51%) climbed today, up by 5% as of 11:30 p.m. EDT, after a Wall Street analyst raised his price target on the company. KeyBanc analyst Alex Kurtz ratcheted up his valuation estimate from $410 to $424 while reiterating an overweight (equivalent to buy) rating.

So what

Kurtz suggests that demand for Twilio's offerings is booming amid "underlying reopening trends" as enterprise customers seek to engage with consumers, citing KeyBanc's proprietary Key First Look Data. Twilio's strategy with its customer data platform (CDP), Segment, which the communications technology company acquired less than a year ago, is still in the early innings but has considerable potential, in the analyst's view.

A person working on a laptop with a sticker of the Twilio logo

Image source: Twilio.

"Additionally, conversations with partners outline ongoing cloud contact center adoption with Twilio's Segment strategy just emerging and could be underappreciated in consensus estimates," Kurtz wrote in a research note to investors.

Now what

Based on the proprietary data and channel checks, combined with encouraging near-term and medium-term trends, KeyBanc is boosting its revenue estimates while raising its price target to $424. Kurtz views Twilio as a "core growth holding."

Twilio's guidance for the fiscal second quarter calls for revenue in the range of $591 million to $601 million, representing growth of 47% to 50%. The forecast includes the revenue contribution for Segment. That should result in an adjusted net loss per share of $0.13 to $0.16. The consensus estimate is for $600.1 million in sales.