Twilio (NYSE:
TWLO) shares tumbled on Friday after the customer engagement software company
issued weaker-than-expected third-quarter guidance, prompting investment firm Stifel to downgrade the stock.
Analyst J. Parker Lane lowered his rating on Twilio (
TWLO) shares to hold from buy and slashed the price target to $90 from $200, noting the lack of visibility into profitability. Lane noted that organic revenue growth continues to fall, with third-quarter sales expected to grow between 29% and 30%, compared to 33% in the second-quarter and 35% in the year-ago period.
Additionally, there are concerns over non-GAAP gross margins and a "wider operating loss than consensus" for the next period, leaving the timeline for "achieving material profitability" as "uncertain."
Twilio (
TWLO) sharesfell nearly 9% to $89.40in premarket trading.
The Jeff Lawson-led Twilio (
TWLO) said it expects to lose on an adjusted basis between 37 and 43 cents per share in the third quarter, while sales are forecast to be between $965-975M, compared to estimates of $979.32M.
Twilio (
TWLO) topped estimates for the second-quarter, as it lost an adjusted 11 cents per share on $943.35M. Analysts were expecting Twilio (
TWLO) to lose 20 cents per share on $920.97M in revenue.
The company said active customer accounts rose to more than 275,000, compared to 240,000 active customer accounts as of June 30, 2021.