Twilio (NYSE:TWLO) shares rose more than 2% pre-market today after Mizuho analysts upgraded the stock to Outperform from Neutral, raising the price target to $140. The upgrade reflects optimism about Twilio’s improved revenue visibility, operating margin expansion, and potential strategic moves ahead of its January 23 Investor Day.
Twilio’s preliminary 2025 guidance projects 7-8% year-over-year revenue growth, signaling meaningful stabilization in its top-line performance. The company is also positioned to achieve double-digit growth beyond 2025, driven by a stronger foundation and opportunities for acceleration.
Operating margins have shown significant improvement, rising from -0.1% in 2022 to an estimated 16% in 2024. Management is expected to issue a 2025 non-GAAP operating margin forecast above consensus, potentially exceeding 22%. This would mark a substantial boost to operational income and free cash flow, further enhancing the company’s financial profile.
Additionally, there is speculation that Twilio could announce a new share buyback program, adding another layer of value for shareholders. While the stock gained approximately 50% in 2024, outpacing the Nasdaq’s 30% growth, clarity on top-line stabilization, improved margins, and an updated mid-term growth outlook are anticipated to drive continued outperformance.