10 Best Enterprise Software Stocks to Buy Now

05. Twilio Inc. (NYSE:TWLO)

Average Analyst Share Price Target Upside: 15.24%

Average Analyst Share Price Target: $69.95

Twilio Inc. (NYSE:TWLO) has underperformed the broader market in the past year due to slowing growth and weak customer spending. However, the company is gaining momentum thanks to its integration of AI into its cloud communications services, which could help it capture more business. Twilio’s AI tools, like Agent Copilot, are designed to improve customer service efficiency, and early tests show promising results. Despite its challenges, Twilio Inc. (NYSE:TWLO) revenue is expected to grow, with analysts predicting a nearly 20% annual increase in earnings over the next five years. Currently trading at a discount, Twilio Inc. (NYSE:TWLO) could offer significant upside as AI adoption expands. Twilio Inc. (NYSE: TWLO) has an average analyst share price target of $69.95, which implies a potential upside of 15.24% from its current level.

For the quarter announced on August 1, Twilio Inc. (NYSE:TWLO) delivered robust results that exceeded market expectations. The company reported a normalized EPS of $0.87, beating estimates by $0.17. Revenue also outperformed forecasts, coming in at $1.08 billion, surpassing projections by $25.82 million. These strong results highlight Twilio Inc. (NYSE:TWLO) resilience and growing momentum despite recent challenges. On August 2, Piper Sandler analyst James Fish assigned a Buy rating to Twilio Inc. (NYSE:TWLO) with a price target of $83.00.

Aristotle Atlantic Focus Growth Strategy made the following comment about Twilio Inc. (NYSE:TWLO) in its Q4 2022 investor letter:

“We sold Twilio Inc. (NYSE:TWLO) and thereby reduced our subsector weight in software. The company reported a decent third quarter, but disappointed on fourth quarter 2022, full year 2023, and long-term guidance. The company is seeing macroeconomic headwinds and a slowdown spreading from technology, social media and cryptocurrency to retail and e-commerce. The other negative disclosure and a driver of this gross margin “miss” was that Twilio’s software sales are not accelerating at the rate that we expected. We are disappointed with this lower topline and low operating margin improvement guidance. The business transformation is taking longer than expected, and there is the heightened possibility that the new software growth could be stifled by more formidable competition as Twilio has made too many missteps.”