TWLO - Twilio: Stuck In Stagnation (Rating Downgrade)

2024-01-25 05:14:48 ET

Summary

• Twilio, a CPaaS company, has struggled with weak growth and is facing fundamental weaknesses.
• Slowing net expansion rates, low gross margins, leadership turnover, and competition are major red flags for Twilio.
• The company is expecting organic revenue growth to slow down even further in Q4, despite a moderation of headwinds in its crypto customer sector.
• Downgrading Twilio stock to sell, especially as the company has rallied over the past quarter despite deteriorating fundamentals.

Now more than ever in 2024, investors need to focus on fundamentals-driven stock-picking to beat the markets this year. Especially in the tech sector, we should focus on growth companies that are still trading at reasonable valuation levels - and avoid broken growth stories....

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