Twilio Inc. (TWLO)
Valuation Overview•Is Twilio Inc. Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
Moderate quality score of 65/100, reflecting stable operating margins and manageable leverage.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Solid fundamental quality, though profitability presents a headwind.
Wall Street is broadly bullish, projecting solid upside alongside robust expected earnings growth. This is paired with healthy capital returns, driven predominantly by aggressive share repurchases.
Returns capital exclusively via buybacks — no active dividend
TWLO demonstrates adequate business quality with stable profitability. This is supported by a highly conservative balance sheet featuring strong liquidity and pristine Altman Z safety.
The company demonstrates solid revenue growth (9.8% 3Y CAGR) paired with stable bottom-line earnings. However, profitability remains a major concern with severely compressed operating margins (4.7%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $1.4B | +13.7% | +9.8% | +23.5% | +40.7% | |
| EBITDA | $107.7M | — | — | — | — | |
| Net Income | $90.1M | +130.9% | — | — | — | |
| EPS (Diluted) | $0.57 | +131.8% | — | — | — | |
| Free Cash Flow | $153.2M | +57.1% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 48.8% | 48.4% | 47.5% | 50.0% |
| Operating Margin | 4.7% | -2.3% | -12.9% | -17.1% |
| Net Margin | 2.0% | -8.7% | -18.5% | -19.7% |
| FCF Margin | 19.0% | 14.6% | 6.0% | 0.8% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $1.27 | $1.50 | +18.1% | ||
| Q1'26 | $1.23 | $1.33 | +8.1% | ||
| Q4'25 | $1.07 | $1.25 | +16.8% | ||
| Q3'25 | $1.05 | $1.19 | +13.3% | ||
| Q2'25 | $0.96 | $1.14 | +19.0% | ||
| Q1'25 | $0.99 | $1.00 | +1.0% | ||
| Q4'24 | $0.86 | $1.02 | +18.9% | ||
| Q3'24 | $0.73 | $0.87 | +18.9% |
Total return is +59.6% (1Y), outperforming the benchmark by +34.6%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +34.6% | +25.2% | — |
| 1Y | +59.6% | +34.6% | — |
| 3YCAGR | +40.5% | +21.4% | — |
| 5YCAGR | -12.7% | -24.7% | — |
| 10YCAGR | +20.5% | +7.0% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Twilio Inc. (TWLO) valuation, health, and returns.
Twilio Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -55.8% downside from DCF intrinsic value of $82.24)
Twilio Inc. has multiple valuation anchors: DCF Intrinsic Value: $82.24 | Peer Relative Fair Value: $12.82 | Wall Street Analyst Target: $197.08 (implying +5.9% upside). A convergence of these signals offers higher conviction.
Twilio Inc. displays good financial health with a composite quality score of 65/100, supported by a Altman Z-Score of 8.3 (safe zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 1.6%.
Twilio Inc. returns capital via buybacks instead of dividends, carrying a 3.1% buyback yield and reducing outstanding shares by -3.7% in the last 12 months.
Twilio Inc.'s current growth trajectory is Accelerating. The company achieved +13.7% 1Y revenue growth and +131.8% 1Y EPS growth, compared to its 3Y revenue CAGR of +9.8%.
Wall Street consensus is Buy based on 52 analysts, beating EPS expectations in 100% of recent quarters with a 16-quarter streak. The consensus price target represents a +5.9% change from current levels.
Investment risks for Twilio Inc. include: -30.3% 1-year max drawdown, high beta (1.41x market volatility). Volatility risk is characterized by a beta of 1.41x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.