Twilio (TWLO) may have delivered a strong Q2 earnings report, but Wall Street is not impressed. Shares of the cloud communications company plunged nearly 20% after hours and another 18% today despite beating estimates and raising 2025 guidance for organic revenue growth. So, does this selloff make TWLO stock a buying opportunity? Let’s look further to see what analysts believe.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
TWLO’s Q2 Snapshot
Twilio reported Q2 revenue of $1.23 billion, topping consensus estimates of $1.19 billion. Also, adjusted earnings came in at $1.19 per share, well above the expected $1.05. The company also raised its 2025 guidance for organic growth and free cash flow, reflecting confidence in its long-term strategy.
Despite the upbeat numbers, falling gross margins and cautious profit guidance for the second half of the year spooked investors.
What Are Analysts Saying?
Despite the dip, several analysts remain bullish on Twilio stock.
- Needham’s Joshua Reilly has reiterated a $125 price target (24.7% upside), noting Twilio’s strong messaging growth and momentum in AI voice solutions. He acknowledged margin headwinds but sees long-term upside as higher-margin products gain traction.
- Kash Rangan from Goldman Sachs also maintained a $145 target (44.6% upside). He highlighted Twilio’s fourth straight quarter of faster growth and strong customer metrics, such as a 108% net expansion rate. The analyst believes Twilio’s strategic moves, which include using AI, global expansion, and a focus on cross-selling, are still in early stages and could lead to big gains.
- Piper Sandler’s James Fish raised his price target to $144 (43.6% upside) from $140, citing Twilio’s strong free cash flow position and early signs of success in go-to-market efforts like self-serve and ISV partnerships.
Overall, Twilio’s dip could be a good entry point for long-term investors. The company is growing steadily, expanding its AI and voice tools, and showing signs of efficiency. Also, if the management is able to stabilize margins and deliver on its strategic roadmap, the stock has the potential to grow.
What Is the Future of TWLO?
Turning to Wall Street, TWLO stock has a Moderate Buy consensus rating based on 16 Buys, four Holds, and one Sell assigned in the last three months. At $134.95, the average Twilio stock price target implies a 34.55% upside potential.
