Key Takeaways:
- Twilio is executing a comprehensive AI-driven strategy focused on voice AI and conversational intelligence, while scaling the adoption of its multi-product platform.
- TWLO stock could reasonably reach $135/share by the end of 2027, based on our valuation assumptions.
- This implies a total return of 32% from today’s price of $102/share, with an annualized return of 12.6% over the next 2.3 years.
Twilio (TWLO) is setting new benchmarks in the communications platform industry by focusing strategically on AI-powered customer engagement across its comprehensive messaging, voice, and data intelligence ecosystem.
The communications leader combines its core programmable communications APIs with Segment’s customer data platform and emerging AI capabilities.
This approach captures evolving customer engagement needs across enterprise markets while addressing the rapid adoption of AI-powered conversational experiences and voice automation.
Twilio serves customers globally through its comprehensive ecosystem, which spans programmable messaging, voice infrastructure, customer data platforms, and AI-powered conversational tools.
In Q2, Twilio delivered record revenue of $1.23 billion, marking its fourth consecutive quarter of double-digit revenue growth and year-over-year growth acceleration. In the June quarter, TWLO stock achieved record non-GAAP income from operations of $221 million and free cash flow of $263 million.
TWLO stock is down almost 80% from its all-time high. Here’s why Twilio stock could deliver solid returns through 2027 as it captures AI voice transformation opportunities while scaling multi-product customer adoption.
See analysts’ full growth forecasts and estimates for Twilio stock (It’s free) >>>
What the Model Says for Twilio Stock
We analyzed the upside potential for Twilio stock using valuation assumptions based on its operational capabilities and expanding market opportunities across AI-powered communications and customer engagement solutions.
Analysts see a significant opportunity ahead for Twilio, given its proven execution track record, communication platform advantages, and systematic approach to building competitive advantages while maintaining market leadership in programmable communications and emerging AI voice applications.
Twilio’s diversified platform strategy provides multiple growth vectors while its AI focus validates that strong execution can drive margin improvement and customer value creation in the competitive communications platform landscape.
Based on estimates of 9% annual revenue growth, 19.5% operating margins, and a normalized P/E valuation multiple of 22.0x, the model projects TWLO stock could rise from $102/share to $135/share.
That would be a 32% total return, or a 13% annualized return over the next 2.3 years.
Value Twilio stock with TIKR’s Valuation Model today for FREE (Find undervalued stocks fast) >>>
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for TWLO stock:
1. Revenue Growth: 9%
Twilio delivered a strong Q2 performance with 13% revenue growth and its fourth consecutive quarter of acceleration, demonstrating resilience across customer segments and geographies. It raised full-year organic revenue growth guidance to 9-10% from the previous 7.5-8.5% range.
Strategic positioning in AI voice applications presents a growth opportunity as enterprises deploy conversational AI, necessitating sophisticated communication infrastructure. ConversationRelay completed nearly 1 million calls in its first quarter of general availability.
Twilio targets sustainable growth through continued innovation in AI-powered communications and the adoption of multi-product platforms. Strong performance across self-serve, ISVs, international, and communication software add-ons, each delivered double-digit revenue growth.
We used a 9% forecast reflecting Twilio’s position in the expanding communications platform market while accounting for tougher comparisons in the second half and the company’s conservative guidance approach.
2. Operating Margins: 20%
Twilio achieved a record 18% non-GAAP operating margin in Q2, up 180 basis points year-over-year, demonstrating strong operational leverage and cost discipline. The company continues to expand its margins while making strategic R&D investments in AI capabilities.
Management targets sustainable margin expansion through operational excellence and the growth of higher-margin products. Voice and AI-powered products typically carry higher gross margins than messaging, supporting long-term margin improvement as product mix evolves.
Recent Segment profitability milestone and continued integration with communications capabilities provide additional margin expansion opportunities as the combined platform scales.
3. Exit P/E Multiple: 22x
Twilio stock trades at moderate multiples reflecting its market position and growth opportunities across the expanding AI-powered communications market. The valuation accounts for competitive dynamics while recognizing platform advantages and the potential for AI voice leadership.
We maintain reasonable valuation levels, given Twilio’s leadership in communications, proven innovation capabilities, and systematic approach to building sustainable competitive advantages through AI integration and platform expansion.
Long-term competitive advantages from comprehensive communications platforms, a strong developer community, and continuous AI innovation should support reasonable valuations as the company executes its AI voice transformation strategy.
Build your own Valuation Model to value any stock (It’s free!) >>>
What Happens If Things Go Better or Worse?
Different scenarios for Twilio stock through 2030 show varied outcomes based on execution and AI communications market conditions: (these are estimates, not guaranteed returns):
- Low Case: Slower AI adoption and margin pressure → 4% annual returns
- Mid Case: Successful platform scaling and AI voice growth → 9% annual returns
- High Case: Strong AI voice leadership and accelerated enterprise adoption → 15% annual returns
Even in the conservative case, TWLO stock offers positive returns supported by a proven ability to execute platform expansion while maintaining customer relationships during competitive periods.
The upside scenario for Twilio stock could deliver strong performance if it successfully captures AI voice transformation opportunities and scales its integrated communications and data platform across the growing customer engagement ecosystem.
See analysts’ growth forecasts and price targets for any stock (It’s free!) >>>
Wall Street Analysts Are Bullish on These 5 Undervalued Compounders With Market-Beating Potential
TIKR just released a new free report on 5 compounders that appear undervalued, have beaten the market in the past, and could continue to outperform on a 1-5 year timeline based on analysts’ estimates.
Inside, you’ll get a breakdown of 5 high-quality businesses with:
- Strong revenue growth and durable competitive advantages
- Attractive valuations based on forward earnings and expected earnings growth
- Long-term upside potential backed by analyst forecasts and TIKR’s valuation models
These are the kinds of stocks that can deliver massive long-term returns, especially if you catch them while they’re still trading at a discount.
Whether you’re a long-term investor or just looking for great businesses trading below fair value, this report will help you zero in on high-upside opportunities.
Click here to sign up for TIKR and get our full report on 5 undervalued compounders completely free.
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
