Insights

Why Twilio Stock is Looking Impressive for Long-Term Investors

In its most recent earnings report, Twilio (NYSE: TWLO) posted some healthy numbers. During this clip from “Ask Us Anything” on Motley Fool Live, recorded on June 14, Fool.com contributor Jose Najarro outlines how the communications software company could see substantial organic growth in the next several years.

Jose Najarro: I just wanted to take a closer look at their financials. We can see, I mean, quarterly revenue they are making a few acquisitions, but we can see this growth. It’s not like it’s slowing down compared to some of the other players when we take a closer look at quarterly revenue growth but I do want to remind investors that they are making a few acquisitions. If we still see the organic revenue trend, I want to say, I mean, it might be slowing down a bit, but hey, they still have strong organic revenue growth as well.

This is also a company that looked dollar-based net expansion of 127%. There is software companies normally tend to have, you want them to have over 100%, but I want to say very little make it over that 120%. I think it’s pretty impressive for Twilio.

What else did I want to show for the company? They did give guidance for the upcoming year, for the upcoming quarter, and they still expect about a 36-38% revenue growth. I do want to say maybe this is one of those companies that is just being put on with all these other software stocks that maybe they were only expected to grow during this pandemic.

But taking a closer look at Twilio, it looks at the even post-pandemic or whatever we are right now, they’re still seeing healthy growth. Again, a company that is not GAAP profitable that is definitely taking quite a hit on certain valuations.

But I think Twilio is one of those that if I probably would’ve made it one of my top two stocks that I talked about today if we didn’t have to choose that little but Twilio, I think it’s looking pretty impressive one as a long-term investor, not worried. I think it’s just being pushed with everything else in the software market.

Jose Najarro has positions in Twilio. The Motley Fool has positions in and recommends Twilio. The Motley Fool has a disclosure policy.

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