Twilio Inc. Fundamental Analysis (NYSE: TWLO)
Twilio Inc. (NYSE: TWLO) shows moderate financial fundamentals with a PE ratio of 33.69, profit margin of 20.62%, and ROE of 14.15%. The company generates $5.5B in annual revenue with strong year-over-year growth of 13.66%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 82.5/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze TWLO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentTWLO demonstrates superior asset utilization.
Valuation Score
ModerateTWLO shows balanced valuation metrics.
Growth Score
ModerateTWLO shows steady but slowing expansion.
Financial Health Score
ExcellentTWLO maintains a strong and stable balance sheet.
Profitability Score
ModerateTWLO maintains healthy but balanced margins.
Key Financial Metrics
Is TWLO Expensive or Cheap?
P/E Ratio
TWLO trades at 33.69 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, TWLO's PEG of 0.01 indicates potential undervaluation.
Price to Book
The market values Twilio Inc. at 4.31 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 104.25 times EBITDA. This signals the market has high growth expectations.
How Well Does TWLO Make Money?
Net Profit Margin
For every $100 in sales, Twilio Inc. keeps $20.62 as profit after all expenses.
Operating Margin
Core operations generate 5.51 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $14.15 in profit for every $100 of shareholder equity.
ROA
Twilio Inc. generates $10.60 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Twilio Inc. produces operating cash flow of $1.09B, showing steady but balanced cash generation.
Free Cash Flow
Twilio Inc. generates strong free cash flow of $1.10B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $7.26 in free cash annually.
FCF Yield
TWLO converts 2.92% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
33.69
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.006
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.31
vs 25 benchmark
P/S Ratio
Price to sales ratio
6.90
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.12
vs 25 benchmark
Current Ratio
Current assets to current liabilities
4.62
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.14
vs 25 benchmark
ROA
Return on assets percentage
0.11
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How TWLO Stacks Against Its Sector Peers
| Metric | TWLO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 33.69 | 35.70 | Neutral |
| ROE | 14.15% | 723.00% | Weak |
| Net Margin | 20.62% | -131080.00% (disorted) | Strong |
| Debt/Equity | 0.12 | 0.22 | Strong (Low Leverage) |
| Current Ratio | 4.62 | 5.96 | Strong Liquidity |
| ROA | 10.60% | 247.00% | Weak |
TWLO outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Twilio Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
175.82%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
106.61%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
2950.80%
Industry Style: Growth, Innovation, High Beta
High Growth