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I'm buying this new stock. (I'm convicted!)

April 17, 2024
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This is my newest addition to my personal stock portfolio. Here's why I'm buying Twilio.

About

Twilio  provides programmable communication tools for making and receiving phone calls, sending and receiving text messages, and performing other communication functions using its web service APIs.

Services

  • Programmable messaging
  • Programmable voice
  • Sendrid Emails) - FinMeUp uses Sendgrid
  • Programmable video
  • Whatsapp Business API
  • The Twilio Super Network cosisting of various other innovative services.

 

Why Im bullish

  • Scaleable business mode- APIs
  • High demand for services
  • Sticky product- Once a business uses Twilio, the switching cost is extremely high. Most kf the businesses that I know use one of Twilios services, esepcially Sendgrid. (This includes FinMeUp)

Once you have integrated their services, it does not make sense to switch to a competitor. 

  • Share price had a massive pullback recently

Down 71% from July 2021.

  • Recurring revenue model
  • High net retention
  • High net expansion growth rate (131% in 2021)
  • Growth expected to continue

Guidance for Q1 2022:

Revenue of $855-$865

Representing Year-on-Year growth of 45-47%

Non-GAAP loss per share ($0.26-$0.22)

  • Indisider overall net purchasers by 433 900 shares according new Yahoo finance data In the past few months.
  • High organic growth (see chart)
  • CAGR growth of 59% since 2016
  • International revenue expanding

% of revenues coming from outside the US:

2019= 29%

2020= 27%

2021= 34%

  • Land & Expand growth strategy working well. (See graphic attached)
  • Twilio API first platform seen to be ahead of competitors constantly
  • Usually acquisitions can go really well or really bad, Twilio has been executing really well. For example, their acqusition of Sendgrid was an amazing one (In my opinion)
  • Extremely high analysts ratings- according to various analysts on various platforms, Twilio is highly undervalued.

 

Risks

  • Unprofitable

It is still very difficult to price an unprofitable company. Especilly with feats of a recessions.

Twilio is still unprofitable, but I can see how they will become profitable in the next 3 years.

I believe that theh can produce really good margins once profitable.

  • Loss are still rising
  • Macroenvironment

If businesses suffer, Twilio might be affected, but their products are to an extent recessions proof, as they will be required through good and bad.

 

Conclusion

Ive watched Twilio since the beginning of the year and Im pulling the trigger.

Im buying.

This is a long term investment for me.

If the share price falls further, I will buy more.

 

(Disclaimer: This is not financial advice. Always do your own due diligence. All content is for informational purposes & I am now invested in Twilio, so I am biased.


 


 

 


 


 


 


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