Twilio Stock Slips Despite Analyst Praise

The shares of Twilio Inc (TWLO) are down 1.5% at $295.97 at last check, after the company disappointed with a lower-than-expected fourth-quarter forecast. To follow, no fewer than six analysts raised their price targets, with the highest from RBC all the way to $400, who noted that the company’s fourth-quarter guidance looks “highly conservative.”

With the 20-day moving average moving in as potential pressure, TWLO is still up an impressive 202% year-to-date. Faltering further from its recent rally between mid-September and mid-October, the security is now eyeing its second-straight week of losses.

Analysts are still confident on TWLO, with 18 out of the 21 in coverage at a “buy” or better rating coming into today. Meanwhile, the 12-month consensus price target of $353.54 is still a 19.6% premium to current levels.

Options traders are chiming in after the report as well, with 27,000 calls and 17,000 puts across the tape so far – double what is typically seen at this point. Most popular is the weekly 10/30 300-strike call, where new positions are being opened.

Despite the high volume, the sentiment seems fairly standard for TWLO recently, with double the amount of calls bought for every put in the last 10 days at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 61st percentile of its annual range, meaning calls are being picked up at a slightly higher rate.

Furthermore, the equity’s Schaeffer’s Volatility Scorecard (SVS) ranks at a 97 out of 100, meaning Twilio stock has tended to exceed volatility expectations during the past year. This is a good thing for premium buyers, as it indicates that the stock has consistently delivered bigger returns than its options implied volatility (IV) levels have predicted.

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