Twilio stock jumped to an all-time high Tuesday after an analyst upgraded the communications software maker, saying its annual revenue could soar fivefold by 2022.
XKeyBanc Capital Markets analyst Brent Bracelin upgraded the company to "overweight" with a price target of 99.
Twilio (TWLO) stock surged 8% to close at 87.11 on the stock market today. It blew past an earlier intraday high of 81.16 set on Aug. 24.
Bracelin says Twilio has overcome declining revenue from ride-hailing app Uber. Twilio could hit $2 billion in revenue by 2022, up from $400 million in 2017, Bracelin said in a note to clients.
Twilio Stock Benefits From Revenue Growth
San Francisco-based Twilio's software provides real-time communications software, which app developers use for text messaging and other communications.
"Twilio is the leading communications API (application programming interface) powering Airbnb, Lyft, Hulu, and Instacart, Bracelin said.
"Revenue growth has accelerated for two quarters, rising to 54% year over year last quarter after three years of deceleration on increasing customer diversification," he wrote. "Uber is now at 4% of sales vs. a 17% peak."
Twilio enables app developers to embed software APIs for messaging, voice, chat and video. Bracelin also raised his price target on SendGrid (SEND) to 42 from 32. SendGrid stock climbed 1.3% to 36.73 on Tuesday.
SendGrid Price Target Hiked
Denver-based SendGrid provides a cloud-based email marketing platform. It went public in November with shares priced at 16.
"APIs have become a critical building block for digital transformation," said Bracelin. "The growing popularity of APIs — including Twilio, Stripe and SendGrid — coincides with a maturing software industry where every enterprise with digital aspirations needs to build software."
Stripe, a digital payments startup, also provides APIs. Stripe's software enables companies to accept and track online payments made via credit or debit cards as well as smartphone apps.
Twilio in August reported revenue that topped estimates and swung to a profit from a year-earlier loss.
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