Twilio Inc. (TWLO) shares rose more than 30% during Thursday's session after the cloud software firm reported better-than-expected first quarter financial results on Wednesday after the bell. Revenue rose 56.5% to $364.86 million, beating consensus estimates by $36.59 million, and non-GAAP earnings per share came in at six cents, beating consensus estimates by 17 cents. The company anticipates revenue of between $365 million and $370 million during the second quarter, which is higher than the $323.4 million consensus estimate.
Analysts reacted favorably to the news with a series of upgrades and higher price targets. Bank of America reiterated its Top Pick Buy rating and raised its price target from $125 to $195, saying that work-from-home tailwinds will more than offset weakness in travel, hospitality, and ride-sharing. Cowen added that COVID-19 is a huge "accelerant" for Twilio stock.
Twilio withdrew its full-year guidance due to the impact of COVID-19, but the overall trend appears positive for the company's revenue prospects throughout the year.
From a technical standpoint, Twilio stock broke out from prior highs to fresh 52-week highs. The relative strength index (RSI) moved into overbought territory with a reading of 84.00, but the moving average convergence divergence (MACD) extended its bullish move higher. These indicators suggest that the stock could see some consolidation before resuming its move higher.
Traders should watch for consolidation between trendline resistance of around $167.00 and prior highs of $133.00 over the coming sessions. If the stock breaks down from those levels, traders could see a move toward trendline support at $105.00. If the stock breaks out higher, traders could see a move to fresh 52-week highs.
The author holds no position in the stock(s) mentioned except through passively managed index funds.