Twilio Surges to All-Time Highs
May 22, 2020
NYC Contact Tracing Initiative##
Twilio has surged to all-time highs after announcing today that it will power the communications for New York City’s COVID-19 contact tracing initiative. The city is planning to deploy a cloud-based contact center on Twilio Flex and leverage Twilio SMS and Voice as key parts of the city’s COVID-19 tracing program.
More specifically, Twilio has built an omnichannel contact center using Twilio Flex to call, message or email COVID-19 patients, educate them on the virus, and identify their close contacts through self-reporting. The platform also provides messaging-based alerts using Twilio Voice, SMS, email or WhatsApp that prompt patients to fill out secure surveys on their symptoms.
Refresher on Twilio##
As a quick refresher: Twilio is a cloud communication platform that enables developers to embed communications such as phone, VoIP, and messaging into their web, desktop, and mobile software applications.
We first invested clients in TWLO in August 2019, and the stock had a volatile few quarters preceding COVID-19. We held through the volatility, however, and stuck to our long-term thesis on its transformation of communications workflows.
In the nearer term, we believe Twilio can see its demand rise through and post the COVID-19 pandemic, as it offers tools for companies to move from on-premise call centers to cloud-based call centers that allow customer service agents to work remotely.
Our Latest View##
After blowout Q1 results mitigated many concerns from bearish investors on the impact of COVID-19 on Twilio's customer base, the company continues to step up its growth initiatives and play "offense" while other communications companies are playing defense.
To be clear, this stock is one of the most volatile and optically expensive (on an EV/sales basis) in our portfolio today. It does not "screen cheap" for prospective investors, and its execution historically has not been perfect (we saw billing issues in 2H 2019, for example, driving much of the volatility pre COVID-19, in our view). But therein lies the continued opportunity for us as long-term investors.
We believe investors are still under-appreciating the longevity of top-line growth and margin leverage Twilio will generate over the next 3-5 years. At $200/share today, the risk/reward is marginally less attractive, but our estimates have improved as execution has progressed. We remain bullish on this company.
Cash Management
© Copyright 2024 Titan Global Capital Management USA LLC. All Rights Reserved.
Titan Global Capital Management USA LLC ("Titan") is an investment adviser registered with the Securities and Exchange Commission (“SEC”). By using this website, you accept and agree to Titan’s Terms of Use and Privacy Policy. Titan’s investment advisory services are available only to residents of the United States in jurisdictions where Titan is registered. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities or investment products. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings and other information provided are for illustrative purposes only and are not to be considered investment recommendations. The content on this website is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services.
Please refer to Titan's Program Brochure for important additional information. Certain investments are not suitable for all investors. Before investing, you should consider your investment objectives and any fees charged by Titan. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested, including principal. Brokerage services are provided to Titan Clients by Titan Global Technologies LLC and Apex Clearing Corporation, both registered broker-dealers and members of FINRA/SIPC. For more information, visit our disclosures page. You may check the background of these firms by visiting FINRA's BrokerCheck.
Various Registered Investment Company products (“Third Party Funds”) offered by third party fund families and investment companies are made available on the platform. Some of these Third Party Funds are offered through Titan Global Technologies LLC. Other Third Party Funds are offered to advisory clients by Titan. Before investing in such Third Party Funds you should consult the specific supplemental information available for each product. Please refer to Titan's Program Brochure for important additional information. Certain Third Party Funds that are available on Titan’s platform are interval funds. Investments in interval funds are highly speculative and subject to a lack of liquidity that is generally available in other types of investments. Actual investment return and principal value is likely to fluctuate and may depreciate in value when redeemed. Liquidity and distributions are not guaranteed, and are subject to availability at the discretion of the Third Party Fund.
The cash sweep program is made available in coordination with Apex Clearing Corporation through Titan Global Technologies LLC. Please visit www.titan.com/legal for applicable terms and conditions and important disclosures.
Cryptocurrency advisory services are provided by Titan.
Information provided by Titan Support is for informational and general educational purposes only and is not investment or financial advice.
Contact Titan at support@titan.com. 508 LaGuardia Place NY, NY 10012.