Twilio Inc (NYSE: TWLO) sure is one of the hardest hit tech names this year, but the stock down more than 65% is still “not” a buy, as per a Stifel analyst.
Twilio stock does not have a ‘meaningful’ upside from here
A day earlier, the cloud company said it now expects to lose up to 43 cents a share this quarter on $965 million to $975 million in revenue. In comparison, analysts had called for $979 million in revenue and only 10 cents of per-share loss.
Consequently, J. Parker Lane downgraded Twilio stock to “hold” and lowered his price target to $90 a share that does not represent a “meaningful” upside from where it’s trading on Friday. In his note, the analyst said:
We believe the near-term picture for TWLO appears less clear, and investor skepticism around the mid/long margin framework is likely to weigh on shares until the company delivers consistent, material improvement.
Recession will make it more difficult for Twilio to recover
Lane is disappointed in the fact that the NYSE-listed firm continues to see a decline in its organic revenue. It was up 35% YoY in Q1, slipped to 33% in Q2, and is seen declining further to 30% in the current financial quarter.
Lowered guidance, he added, is a signal that the management is still “uncertain” about the time it’ll take to turn profitable, and the looming recession is not going to make it any easier for Twilio stock.
Such risks overshadowed, for Lane, the market-beating results Twilio reported for its Q2 last night. Also on the bright side were the Active Customer Accounts that topped 275,000 versus 240,000 in the same quarter last
