3. Twilio Inc. (NYSE:TWLO)
ARK Investment Management’s 13 Portfolio: 3.45%
ARK Investment Management’s Stake Value: $827.55 million
Number of Hedge Fund Holders: 80
Year-To-Date Share Price Loss : 61.13%
Twilio Inc. (NYSE:TWLO) represents 3.45% of Cathie Wood’s Q1 2022 portfolio, with a stake consisting of 5.02 million shares valued at $827.6 million. The firm deals in the operation of a cloud communications platform.
As at the end of the fourth quarter, 80 hedge funds reported bullish bets on Twilio Inc. (NYSE:TWLO) shares with a collective price tag of $5.13 billion. This shows a downward trend from the previous quarter, where 96 hedge funds held combined stakes worth $6.36 billion in the firm.
On May 16, Baird analyst William Power downgraded Twilio Inc. (NYSE:TWLO) to ‘Neutral’ from ‘Outperform’ with a price target of $120, down from $155. The analyst noted that in the current risky market climate, he’s shifting his software focus to companies that boast global platforms, competitive moats, and strong free cash flow and balance sheets.
For the first quarter, Twilio Inc. (NYSE:TWLO) posted EPS of $0.00, which outperformed estimates by $0.21. Quarterly revenue of $875.4 million showed an increase of 48.37% year-on-year, and also beat estimates by $11.6 million.
RiverPark Funds, an investment firm, mentioned many stocks in its Q4 2021 investor letter, and Twilio Inc. (NYSE:TWLO) was one of them. The fund said:
“Twilio: TWLO shares were also down sharply to end the year. Just like after 1Q and 2Q, despite another quarterly beat in 3Q, management guidance–which we believe to be conservative– disappointed some investors. Third quarter revenue of $740 million was up 65% year over year, significantly exceeding management’s guidance of 50%-52% revenue growth. Management guided 4Q21 revenue to +40% revenue growth, which was ahead of sell side expectations, but likely below buy side expectations. Investors were also troubled by the departure of COO George Hu, who has been credited with rebuilding Twilio’s sales and marketing teams after arriving from SaleForce.com shortly after the company’s IPO in 2016.
The COVID crisis has accelerated the adoption of the company’s cloud-based, integrated communications platform that allows companies in a wide range of businesses to embed digital communications capabilities (video, chat, voice, SMS, fax, and email) into their customer facing applications without needing to build back-end infrastructure and interfaces. Twilio’s total addressable market is now greater than $40 billion, which should grow by 50% over the next few years, providing a strong secular tailwind for the company. We expect the company’s gross margin to continue to expand from 54% in the second quarter toward management’s long-term goal of 60%-65%, and, as the company grows to scale, we expect its non-GAAP operating margin to expand to 25%.”
