Home Factor company Twilio’s new risk factors warn about debt and taxation

Twilio’s new risk factors warn about debt and taxation


VSCalifornia based Twilio (TWLO) provides a cloud-based communication platform for customer engagement. It recently acquired Zipwhip, a toll-free messaging provider, to strengthen its messaging business.

Twilio has also launched a $ 50 million venture capital fund to invest in startups and developers who are building the future of customer engagement. The fund has already invested in a number of startups, including Hyro, Algolia, Calixa and Terazo.

With that in mind, we used TipRanks to review the latest financial performance and new added risk factors for Twilio. (See Best Smart Score Actions on TipRanks)

Third Quarter Financial Results

Twilio announced a 65% year-over-year increase in revenue to $ 740.2 million for the third quarter of 2021, beating the consensus estimate of $ 680.5 million. It posted adjusted EPS of $ 0.01, beating the consensus estimate of a loss per share of $ 0.14. Twilio ended the third quarter with $ 1.5 billion in cash. (See Twilio stock charts on TipRanks).

Risk factors

According to the new TipRanks Risk factors tool, Twilio’s main risk category is Finance and Corporate, representing 33% of the total of the 69 risks identified for the security. Twilio recently updated their profile with five new risk factors.

The company told investors it ended the third quarter with $ 1 billion in debt. He cautions that debt could limit its ability to obtain additional financing for capital expenditures or acquisitions in the future. The company further warns that debt could increase its vulnerability to adverse changes in economic conditions.

Twilio advises investors that its business may not generate enough cash to meet its debt service obligations. As a result, his credit rating may be downgraded if he misses a debt repayment. In addition, the company warns that it may need to sell some of its assets to raise funds to service its debt.

Twilio warns that changes in US and global tax laws could increase its tax liability and negatively affect its cash flow and financial condition. In addition to establishing international standards for taxing multinationals, the company mentions that some countries have enacted or proposed a digital services tax, which could apply to its business.

The sector average of the Finance and Business risk factor is 40%, compared to 33% for Twilio. Twilio stock has gained around 19% year-to-date.

The analysts’ point of view

RBC Capital Analyst Rishi jaluria recently reiterated a buy note on Twilio stock with a price target of $ 450. Jaluria’s price target suggests an upside potential of 63.75%.

The consensus among analysts is a strong buy based on 16 buys and 2 takes. Twilio’s average price target of $ 426.25 implies upside potential of 55.11% from current levels.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.