Twilio (TWLO) stock sinks as market gains: Here's why

In the latest trading session, Twilio (TWLO) closed at $107.00, marking a -1.91% move from the previous day. The stock's performance was behind the S&P 500's daily gain of 0.27%. Elsewhere, the Dow gained 0.43%, while the tech-heavy Nasdaq added 0.37%.

The company's shares have seen an increase of 18% over the last month, surpassing the Computer and Technology sector's gain of 2.4% and the S&P 500's gain of 1.85%.

Analysts and investors alike will be keeping a close eye on the performance of Twilio in its upcoming earnings disclosure. The company's upcoming EPS is projected at $1.05, signifying a 2.94% increase compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.25 billion, indicating a 10.4% increase compared to the same quarter of the previous year.

TWLO's full-year Zacks Consensus Estimates are calling for earnings of $4.49 per share and revenue of $4.91 billion. These results would represent year-over-year changes of +22.34% and +10.14%, respectively.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Twilio. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.58% higher. Currently, Twilio is carrying a Zacks Rank of #3 (Hold).

From a valuation perspective, Twilio is currently exchanging hands at a Forward P/E ratio of 24.3. For comparison, its industry has an average Forward P/E of 31.58, which means Twilio is trading at a discount to the group.

It is also worth noting that TWLO currently has a PEG ratio of 1.28. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Internet - Software industry stood at 2.34 at the close of the market yesterday.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 64, placing it within the top 26% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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