Is it Still Safe to Invest in Twilio Inc. (TWLO)?

RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) returned -3.23% for the third quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 0.58%, the Russell 1000 Growth Total Return Index (“RLG”) returned 1.16%, while the Morningstar Large Growth Category returned -0.07%. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

RiverPark Large Growth Fund, in its Q3 2021 investor letter, mentioned Twilio Inc. (NYSE: TWLO) and discussed its stance on the firm. Twilio Inc. is a San Francisco, California-based cloud communications platform with a $46.6 billion market capitalization. TWLO delivered a -21.07% return since the beginning of the year, while its 12-month returns are down by -16.44%. The stock closed at $267.17 per share on December 02, 2021.

Here is what RiverPark Large Growth Fund has to say about Twilio Inc.  in its Q3 2021 investor letter:

TWLO shares were also a top detractor for the quarter. Just like after 1Q, despite another quarterly beat in 2Q, management guidance–which we believe to be conservative–disappointed some investors. Second quarter revenue of $669 million was up 67% year over year, significantly exceeding management’s guidance of 47%-50% revenue growth. Management guided 3Q21 revenue to 50%-52% revenue growth, which was ahead of expectations, but due to continued investment also guided to a non-GAAP operating loss of $25 million-$30 million, which was below the Street’s forecast of a $12 million loss.

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%.”

Based on our calculations, Twilio Inc. (NYSE: TWLO) ranks 20th in our list of the 30 Most Popular Stocks Among Hedge Funds. TWLO was in 96 hedge fund portfolios at the end of the third quarter of 2021, compared to 98 funds in the previous quarter. Twilio Inc. (NYSE: TWLO) delivered a -25.54% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.