Overall TWLO gets a fundamental rating of 5 out of 10. We evaluated TWLO against 88 industry peers in the IT Services industry. No worries on liquidiy or solvency for TWLO as it has an excellent financial health rating, but there are worries on the profitability. TWLO is valued quite expensively, but it does show have an excellent growth rating.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year TWLO was profitable.
TWLO had a positive operating cash flow in the past year.
In the past 5 years TWLO always reported negative net income.
In multiple years TWLO reported negative operating cash flow during the last 5 years.

1.2 Ratios

The Return On Assets of TWLO (0.69%) is comparable to the rest of the industry.
TWLO's Return On Equity of 0.85% is in line compared to the rest of the industry. TWLO outperforms 52.27% of its industry peers.
TWLO's Return On Invested Capital of 0.97% is in line compared to the rest of the industry. TWLO outperforms 48.86% of its industry peers.

		Industry Rank	Sector Rank
ROA	0.69%
ROE	0.85%
ROIC	0.97%

ROA(3y)-6.62%

ROA(5y)-6.47%

ROE(3y)-7.9%

ROE(5y)-7.62%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

With a Profit Margin value of 1.37%, TWLO perfoms like the industry average, outperforming 48.86% of the companies in the same industry.
TWLO has a Operating Margin (2.24%) which is in line with its industry peers.
TWLO has a better Gross Margin (49.35%) than 70.45% of its industry peers.
In the last couple of years the Gross Margin of TWLO has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	2.24%
PM (TTM)	1.37%
GM	49.35%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y1.45%

GM growth 5Y-0.98%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

TWLO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for TWLO has been reduced compared to 1 year ago.
The number of shares outstanding for TWLO has been increased compared to 5 years ago.
TWLO has a worse debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 6.04 indicates that TWLO is not in any danger for bankruptcy at the moment.
TWLO has a better Altman-Z score (6.04) than 82.95% of its industry peers.
The Debt to FCF ratio of TWLO is 1.27, which is an excellent value as it means it would take TWLO, only 1.27 years of fcf income to pay off all of its debts.
TWLO has a better Debt to FCF ratio (1.27) than 76.14% of its industry peers.
TWLO has a Debt/Equity ratio of 0.13. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.13, TWLO is in the better half of the industry, outperforming 68.18% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.13
Debt/FCF	1.27
Altman-Z	6.04

ROIC/WACC0.11

WACC8.99%

2.3 Liquidity

A Current Ratio of 4.68 indicates that TWLO has no problem at all paying its short term obligations.
With an excellent Current ratio value of 4.68, TWLO belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
TWLO has a Quick Ratio of 4.68. This indicates that TWLO is financially healthy and has no problem in meeting its short term obligations.
TWLO's Quick ratio of 4.68 is amongst the best of the industry. TWLO outperforms 87.50% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	4.68
Quick Ratio	4.68

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 29.01% over the past year.
TWLO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 89.75% yearly.
Looking at the last year, TWLO shows a quite strong growth in Revenue. The Revenue has grown by 12.84% in the last year.
TWLO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 31.48% yearly.

EPS 1Y (TTM)29.01%

EPS 3YN/A

EPS 5Y89.75%

EPS Q2Q%22.55%

Revenue 1Y (TTM)12.84%

Revenue growth 3Y16.19%

Revenue growth 5Y31.48%

Sales Q2Q%14.71%

3.2 Future

The Earnings Per Share is expected to grow by 16.65% on average over the next years. This is quite good.
TWLO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.41% yearly.

EPS Next Y32.58%

EPS Next 2Y22.69%

EPS Next 3Y20.23%

EPS Next 5Y16.65%

Revenue Next Year13.02%

Revenue Next 2Y10.85%

Revenue Next 3Y9.81%

Revenue Next 5Y8.41%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 28.01, which means the current valuation is very expensive for TWLO.
TWLO's Price/Earnings is on the same level as the industry average.
TWLO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 23.10, TWLO is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TWLO is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 24.26. TWLO is around the same levels.

		Industry Rank	Sector Rank
PE	28.01
Fwd PE	23.1

4.2 Price Multiples

TWLO's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TWLO is on the same level as its industry peers.

		Industry Rank	Sector Rank
P/FCF	24.85
EV/EBITDA	51.99

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
TWLO's earnings are expected to grow with 20.23% in the coming years. This may justify a more expensive valuation.