Twilio Inc (NYSE: TWLO) recently announced Khozema Shipchandler replaced Jeff Lawson as CEO.
The downward revision of revenue forecasts has impacted the stock over the past six months, according to Piper Sandler.
The Twilio Analyst: James Fish upgraded the rating for Twilio from Neutral to Overweight, while raising the price target from $75 to $82.
The Twilio Thesis: Although the company is not "completely out of the woods yet," the recent pressure on the stock represents "a good opportunity to own the best house in this neighborhood," Fish said in the upgrade note.
The analyst mentioned four reasons for turning bullish:
- Potential for "material upside" for Twilio's free cash flows, as the company has "executed better on profitability initiatives."
- Catalysts are emerging, "including a potential business-split, marketing budget improvement, crypto, and capital return."
- While concerns persist around the company's 2024 revenues, inputs are improving and headwinds are likely to abate during the year.
- The opportunity for investors to "own a best-in-class CPaaS business at an average CPaaS/telco multiple."