We assign a fundamental rating of 5 out of 10 to TWLO. TWLO was compared to 88 industry peers in the IT Services industry. While TWLO has a great health rating, there are worries on its profitability. TWLO is valued quite expensive, but it does show an excellent growth.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

TWLO had positive earnings in the past year.
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

TWLO has a Return On Assets (0.69%) which is in line with its industry peers.
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 has a Return On Invested Capital (0.97%) which is in line with 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

The Profit Margin of TWLO (1.37%) is comparable to the rest of the industry.
TWLO's Operating Margin of 2.24% is in line compared to the rest of the industry. TWLO outperforms 46.59% of 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%

More info and screens

ROA

ROE

ROIC

Operating and Profit Margin

Show most profitable peers

2. Health

2.1 Basic Checks

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

2.2 Solvency

An Altman-Z score of 6.13 indicates that TWLO is not in any danger for bankruptcy at the moment.
TWLO has a Altman-Z score of 6.13. This is amongst the best in the industry. TWLO outperforms 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.
Looking at the Debt to FCF ratio, with a value of 1.27, TWLO is in the better half of the industry, outperforming 76.14% of the companies in the same industry.
A Debt/Equity ratio of 0.13 indicates that TWLO is not too dependend on debt financing.
TWLO has a better Debt to Equity ratio (0.13) than 68.18% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.13
Debt/FCF	1.27
Altman-Z	6.13

ROIC/WACC0.1

WACC9.22%

2.3 Liquidity

A Current Ratio of 4.68 indicates that TWLO has no problem at all paying its short term obligations.
The Current ratio of TWLO (4.68) is better than 87.50% of its industry peers.
A Quick Ratio of 4.68 indicates that TWLO has no problem at all paying 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

More info and screens

WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

Show peers with great health

3. Growth

3.1 Past

TWLO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.01%, which is quite impressive.
Measured over the past years, TWLO shows a very strong growth in Earnings Per Share. The EPS has been growing by 89.75% on average per year.
TWLO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.84%.
The Revenue has been growing by 31.48% on average over the past years. This is a very strong growth!

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

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

EPS Next Y32.57%

EPS Next 2Y22.6%

EPS Next 3Y20.02%

EPS Next 5Y16.65%

Revenue Next Year13.02%

Revenue Next 2Y10.88%

Revenue Next 3Y9.84%

Revenue Next 5Y8.41%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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.

More info and screens

Find the best growth stocks

Show best growing peers

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 29.25, TWLO can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of TWLO is on the same level as its industry peers.
TWLO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
TWLO is valuated rather expensively with a Price/Forward Earnings ratio of 24.15.
TWLO's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 25.98. TWLO is around the same levels.

		Industry Rank	Sector Rank
PE	29.25
Fwd PE	24.15

4.2 Price Multiples

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

		Industry Rank	Sector Rank
P/FCF	25.95
EV/EBITDA	52.91

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 20.02% in the coming years. This may justify a more expensive valuation.