What happened
Twilio (TWLO 2.94%) had a hump day to forget. The specialty-tech company saw its share price decline by slightly over 10%, following a price-target cut from an otherwise bullish analyst tracking the stock.
So what
Wednesday morning, Oppenheimer's Ittai Kidron reduced said Twilio price target substantially, to $380 per share from the previous (and much higher) level of $550. Despite that, the Oppenheimer prognosticator is keeping the outperform (i.e., buy) recommendation on the stock.
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Kidron isn't alone in reducing expectations for Twilio lately. Last month, several other analysts made similar moves. Wells Fargo's Michael Turrin and Needham's Ryan Koontz also lowered their price targets. Turrin now feels Twilio is worth $285 per share instead of his preceding $400, although in his opinion, it's still a buy despite falling gross profit margins over the past 10 quarters.
As for Koontz, like his peers, he still thinks the company is a buy. However, he also chopped his target -- in his case, to $350 per share (from $400). Koontz still feels that the company can remain a leader in the Communications Platform as a Service (CPaaS) niche and produce growth from its services.
Now what
Despite the ding it suffered from this latest price-target cut, Twilio is still a compelling stock for many investors. The company is doing better than many expected it to, with the 54% year-over-year revenue growth it posted in its most recently reported quarter far higher than even some of the more bullish analysts expected.
Still, some market players remain jittery about tech stocks, in general, and Twilio continues to post bottom-line losses. No wonder investors are sensitive to even slightly negative developments around the stock.
