Why Growth Investors Should Keep Watch on Twilio Stock

Twilio shares peaked at over $400 last year

May 31, 2022 at 12:40 PM
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Twilio Inc. (NYSE:TWLO) is an American tech company that provides tools for communication to millions of developers and thousands of businesses across 180 countries. TWLO's communications APIs enable companies to engage with their customers across voice, conversations, messaging, video, and email. Twilio Segment, their customer data platform, allows companies to create personalized interactions and automated customer profiles based on first-party data from multiple channels.

On May 16, Twilio announced that Joyce Kim will be joining the company as Chief Marketing Officer. According to the company’s press release, Kim will lead their global marketing efforts as the company works towards its goal of becoming the leader in the emerging customer engagement category. Joyce Kim joins Twilio from Genesys, where she also served as Chief Marketing Officer. Prior to Genesys, Kim was Chief Digital & Marketing Officer for Arm.

Twilio stock has declined about 68% year-over-year and has shed 74% since peaking at a 52-week high of $412.68. Additionally, shares of TWLO have dropped 59% year-to-date and are down by approximately 3% over the past month. However, Twilio stock has recovered 24% since bottoming at a two-year low of $87.67. At last glance, the tech name is trading down 0.4% at $107.95.

Short sellers have been piling on to the equity. During the past two reporting periods, short interest jumped 29.4%, and now accounts for 4.3% of the stock's total available float.

Meanwhile, in the options pits, traders are leaning bullish, and an unwinding of optimism could also create headwinds. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TWLO sports a 10-day call/put volume ratio of 2.24, which sits in the 80th percentile of its annual range. In other words, options traders have been picking up calls at a quicker-than-usual clip. 

Short-term options traders have also been quite call-biased. This is per Twilio stock's Schaeffer's put/call open interest ratio (SOIR) of 0.68, which stands above only 8% of all other annual readings. 

Regardless, TWLO is well-positioned to sustain its growth with $5.22 billion in cash on their balance sheet and only $1.27 billion in total debt. Furthermore, TWLO now trades at a price-sales ratio of 5.54, making Twilio stock an exciting option for growth investors over the next few years.

 

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