Could Twilio Stock Still Make Millionaires? A Deep Dive into Twilio's Future
What does Twilio do?
Twilio's cloud-based platform processes text messages, calls, videos, and other features for mobile apps. Instead of building those features from scratch, developers can outsource them to Twilio's platform with a few lines of code.
Why did Twilio's stock drop nearly 90% from its all-time high?
By the time its stock peaked in early 2021, its enterprise value hit $70 billion -- or 25 times the revenue it would generate in 2021. Unfortunately, that frothy valuation set it up for a steep drop as its growth cooled off over the following two years. Twilio mainly blamed the macro headwinds for that slowdown, because it forced companies to rein in their cloud spending. However, it's also saturating its core market, and it faces tough competition from similar cloud-based communication platforms.
Can Twilio mint more millionaires in a decade?
With an enterprise value of $7.8 billion, Twilio trades at just 1.8 times this year's sales. If it continues to generate single-digit revenue growth and doesn't find new ways to grow, it could underperform many of its cloud-based peers over the next decade.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.