Cloud Communications Provider Twilight(NYSE: TWO) He rushed strikingly in the last three months of 2024. 2025 also started on high, but shares of the company have taken a big beat after he hit his 52 week peak on January 31.
Twilighting stock is 40% of the 52 week peak it achieved earlier this year. The general uncertainty in the stock market due to the Trump administration tariff policies, along with a mixed quarterly report in February, has combined to send shares of this company packing in recent months.
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However, a sudden twilight disadvantage looks like an opportunity for investors to buy a company that benefits from the increasing adoption of Artificial Intelligence (AI) In the Cloud Communications Space, especially considering that his fate could turn around when he releases his quarterly results on May 1.
Let's take a look at the reasons why a trilogy stock could recover its mojo soon.
Twilio announced solid results for the fourth quarter of 2024 in February this year. His revenue was up 11% of the period a year ago, while notGaap Earnings increased 16% year on year to $ 1.00 per share. Twilio beat Wall Street revenue estimate, but his earnings were a little lighter than the $ 1.03 expectation of the share.
Investors were quick to press the panic button, and that was no surprise, as the guidance was lighter than expected. Twilio expects its top line to increase by 8% to 9% year -on -year in the first quarter of a financial 2025, which would be a slight deceleration over its CH4 performance. It forecasts a 13% year -on -year jump in earnings to $ 0.90 per share at the center of its guidance range, which is well below the consensus estimate of $ 0.98 per share.
However, there is a possibility that revenue and twilight earnings could land ahead of expectations. That's because the demand for AI -focused communications equipment helps it win a bigger share of customer wallets, encouraging them to spend more money on its offerings. This is evident from iniquity in twelve cross-selling statistics.
In his Investors Day presentation in January this year, Twilio Management noted that the number of active customers who bought additional products from the company jumped 16% year -on -year in the third quarter last year. That was an improvement of five percentage points seen in the previous quarter. Importantly, the opportunity for cross-selling continues to be robust going forward as well, considering that Twilio has over 325,000 active customer accounts at the end of 2024.
Of these, 9,000 customers were building AI -focused cloud communication tools using last year's Twilio Platform. So there is a huge chunk of the existing customer base of twilighting out there that has yet to adopt its AI-based AI assistants, customer engagement equipment powered by AI, and predictive analytics tools-to help its clients improve sales conversion rates.
Twilio predicts the demand for AI tools in cloud communications and in the customer data platform (CDP) markets that it serves to increase its market that can be addressed in the future. It estimates that the company's current markets will provide a revenue opportunity that can be addressed worth $ 119 billion by 2028. AI chat is expected to add another $ 39 billion to that opportunity over the next three years.
Twilio ended 2024 with just under $ 4.5 billion in revenue. Therefore, AI could eventually help it achieve significant growth in its top and bottom lines by helping twilight attract more customers, and also by enabling it to cross-sell its offerings to existing customers. As such, don't be surprised to see the first quarter results of a twilight 2025 quarter, intended to be released after the market closes on May 1, beat the expectations.
The additional revenue opportunity that AI creates for twilight bodes well for its guidance. Furthermore, investors should not forget that the company is anticipating a nice acceleration beside it over the next three years, which could convert to solid gains growth.
The edge of a twilight-free operating in 2024 was 16%. The company expects this figure to increase to a range of 21% to 22% in 2027. This seems achievable given the points discussed above, which is why investors can expect a solid bottom line growth from the company going forward.
As the chart below tells us, Twilio earnings are expected to increase by 17% in 2026 and nearly 22% in 2027.
Assuming twilight earnings increased to $ 6.22 per share in 2027 and trades in line with the tech-laden NASDAQ-100 Multiple earnings onwards index of 24 then (using the index as a proxy for technology stocks), the stock could hit $ 149. That points towards a potential 69% earnings over the next three years.
Given that twilight is now trading 20 times on earnings, the time seems right for investors to buy. Possible turning in its fate next month could set the platform for a bull run in this cloud computer stock.
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Chauhan Harsh He does not have a position in any of the stocks mentioned. The Motley Fool has jobs in and recommends twilight. The fool has motley and Disclosure Policy.
