Baird upgrades this cloud communications stock, calling for around 40% upside

Twilio could be on the verge of strong gains ahead, and investors should buy the stock, according to Baird. The firm upgraded the cloud communications stock to an outperform from neutral and raised its price target to $160 per share from $115. Baird’s forecast implies about 41% upside from Thursday’s close. Analyst William Power said he left the company’s investor day confident ahead of its fourth-quarter results release, where he expects Twilio to surpass Wall Street estimates and raise its forward guidance. “We acknowledge the recent strength, which we had been wary to chase, but expect a potential beat-and-raise cadence to continue to push shares higher, particularly with the strengthening profitability, cash flow, and capital returns,” Power said. “We also view valuation as still reasonable, particularly given potential upside scenarios.” The analyst added that Twilio also presents an artificial investment opportunity as a large swath of mid-sized companies used the company’s cloud platform for customer-facing products. “Notably, 9,000 AI companies and 90% of Forbes 50 AI startups are building on TWLO as a customer engagement layer, and AI related companies spent $260 million on Twilio in the last 12 months,” he said. “While we believe most of that is from legacy products, AI-driven products, including voice and messaging bots running on TWLO, could present a growing opportunity.” Shares have advanced more than 55% over the past year, and the company will report fourth-quarter results on Feb. 13. TWLO 1Y mountain Twilio stock. Analysts are mostly bullish on the stock. LSEG data shows that 17 of the 31 who cover Twilio rate it as a buy or strong buy, according to LSEG.