Keep A Margin Of Safety Before Buying Twilio Inc. (TWLO)

The price of Twilio Inc. (NYSE:TWLO) stock ended October 08, 2019 trading at $108.4 which saw downtrend of 21.39% since the beginning of 2019. For most investors, the -3.99% rally in the share price could have prompted them tosell the stock, but doing that would be a mistake as it would be taking into consideration only the short-term performance of the stock.

A look at the TWLO stock today shows that it has gained 41.48% of its value over the past one year, which has led to some investors becoming excited about the short-term performance of Twilio Inc. (NYSE:TWLO). If we turn to the stock analysts in general, they revealed that most of them are still bullish about the chances of the shares. The consensus rating from analysts for Twilio Inc. (TWLO) is 1.6 which is a buy rating. Over the past week, the stock has been rated as a Buy 16 times while it has been rated as a Hold 1 times. The 52-week high price for TWLO is $151 which is attained on June 20 while its 52-week low currently stands at $62.43 and was reached on October 26. At the moment, the stock is trading $-16.43 below its YTD moving average set at $124.83.

Moving on, Twilio Inc. (TWLO) last released its earnings for the June 2019 quarter of the fiscal year. The company performed decently over the past three months, with its earnings up 96% year-over-year at $-0.49. The company brought a surprise of 58 as analysts were predicting $-0.31 per share. The revenue generated by Twilio Inc. in the June 2019 quarter surged by 86% to reach $275.04 million. This is highcompared to the $147.75 million it recorded in the same quarter last year. To see what traders should watch in its September 2019 financial results, analysts have consensus earnings per share of $-0.38 which is lowerthan the $-0.15 recorded in the same quarter a year ago. Over the next 12 months, the earnings per share are expected to move by 85.8%. If it achieves that, then the company firmly believes that its long-term annual earnings growth rate target set at 33.2 % could be achieved. The company has also recorded a revenue of $881.4 million over the past 12 months.

In order to determine if the stock is worthy of your patience, you should know that Twilio Inc. (NYSE:TWLO) is now trading at 0X the earnings per share recorded over the past 12 months. This is a downtrend compared to the readings of the sector which is 29.32X while the industry average stands at 39.33X. The most popular way to value a stock is to look at its historic Price-to-Earnings (P/E) ratio with the help of its earnings report over the past 12 months. Twilio Inc. was able to achieve an EPS of $-1.78 during the last four quarters. The P/E ratio is widely known due to the fact that it is widely used, simple, effective, and, tautologically.

On Tuesday, October 08 of 2019, the 14-day Absolute ATR (Average True Range) for TWLO moved by $5. Over the past seven days, the stock’s average daily volatility stood at 4.02%. A stock with a low volatility is usually a good one as it means that investors are very confident in the stock. Twilio Inc.’s trading volume has recently moved to 2.82 million, which is compared with the average daily volume of 3.9 million shares.

The daily chart for TWLO, points out that the company has recorded -11.65% losses over the past six months. However, it is still 73.63% higher than its most recent low trading price. The performance of the stock over the past five days shows that it is down -1.21% though it is -2.3% below its three-week moving average. It is worthy to know that price action is not always clear. There are times when a stock will undergo some negatives, trade erratically within some range or even act very unpredictable. When that happens, then making use of moving averages makes the pattern clearer for traders. Comparing to 50-day SMA, the price of the stock has dropped by -11.31% while it is down -12.19% against the 200-day SMA. This is usually seen as the last support line for a stock, as a move downward could signal a bearish trend or market. The daily chart of TWLO reveals that it has lost some grounds as it ended Tuesday with a -3.11% fall over the past 30 days.