Piper Sandler analysts upgraded Twilio (NYSE:TWLO) from Neutral to Overweight and raised the price target from $75.00 to $82.00. As a consequence, shares surged more than 4% intra-day today.

The analysts commented that after a six-month period of the market adjusting to reduced top-line estimates for Twilio, they are now upgrading the stock to Overweight and increasing the price target.

This revised outlook is based on several key factors: A) Twilio has demonstrated significant potential for upside in Free Cash Flow (FCF) estimates, thanks to effective execution of profitability initiatives; B) there are emerging catalysts for the company, including a potential business split, improvements in marketing budget, developments in the crypto sector, and strategies for capital return; C) despite concerns about 2024’s top-line expectations, revenue seems to be stabilizing, with inputs showing improvement and headwinds expected to lessen in 2024.

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