Why Wednesday's 2 Stand-Out Stock Winners Could Keep Climbing

After an extremely large decline on Tuesday, investors were hopeful that the stock market would be able to post a solid rebound on Wednesday. The good news was that the Dow Jones Industrial Average (^DJI -0.11%), S&P 500 (^GSPC 0.02%), and Nasdaq Composite (^IXIC 0.10%) all did manage to post bounces from their big losses the previous day. The bad news, though, was that those gains were extremely modest and did very little to claw back lost ground.

Data source: Yahoo! Finance.

Yet a couple of stocks really stood out for their much more extensive gains on Wednesday. Starbucks (SBUX 1.00%) has been under pressure for some time, but the coffee giant seemed to regain investors' confidence as it gave details about its longer-term strategy. Meanwhile, Twilio (TWLO 1.08%) made a tough business move, but investors praised the company and sent the stock higher in response. Below, you'll find the details on both companies and where their shares could move further upward in the future.

Starbucks puts its plan in place

Shares of Starbucks moved higher by 5.5% on Wednesday. The move came in the aftermath of the coffee giant's  investor day presentations late Tuesday, which included an upbeat view of where company executives see the business moving in the years ahead.

Interim CEO Howard Schultz presented Starbucks' three-year financial roadmap, setting ambitious but reachable goals for long-term growth. The plan includes initiatives designed to boost comparable store sales, accelerate store count growth, boost margins, and remain disciplined with capital allocation -- all with the end result of boosting earnings growth rates.

In particular, Starbucks expects comparable store sales to grow 7% to 9% across the globe, up from its previous forecast for 4% to 5%. China should play a key role as it hopefully emerges from COVID-related lockdowns. Store counts should rise 7% per year from fiscal 2023 to fiscal 2025, up from a previous projection for 6% annual gains, with a target of 45,000 stores by 2025 and 55,000 by 2030.

If it's successful, then Starbucks could see global revenue grow 10% to 12% per year and earnings per share jump 15% to 20% annually on an adjusted basis. That would represent a complete reigniting of Starbucks' growth engines. It'll be hard to achieve, but with the stock having stalled out for three years now, shareholders are optimistic that this could represent a new phase of share-price appreciation for Starbucks.

Twilio makes tough decisions

Twilio shares jumped more than 10% on Wednesday, regaining lost ground from the previous day. The news wasn't as good for company employees, but shareholders seemed to like the financial discipline that the cloud communications specialist showed.

Twilio announced plans to reduce its workforce by about 11%, citing falling demand for cloud-based services and past decisions to try to accelerate its growth to an unsustainable pace. The move reverses a period of rapid expansion in Twilio's employee ranks, which jumped by nearly 70% in 2021 from 2020 levels.

Twilio has had a tough time lately. A cyberattack raised questions about data security, and growth rates have been slowing. With capital becoming more costly to obtain due to rising interest rates, Twilio is far from the only company to resort to layoffs in order to contain expenses and preserve its financial resources.

In the long run, demand for cloud communications still looks promising, and that's likely the driving force for shareholder optimism today. Cuts are always painful, but they can bring long-term success for the company if done prudently, and that's what investors hope Twilio will achieve.