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Twilio ($TWLO): The Pendulum Swings Both Ways
Hi all! I published my first Substack post this morning, a deep dive into Twilio.
"I believe Twilio is a high-quality business that offers a large short-term dislocation and a long-term opportunity at current prices. While the market was only concerned with revenue growth in 2020-2021 and GAAP profits/dilution now, what ultimately drives long-run stock prices is free cash flow per share, of which the company is poised to produce in spades for many years."
Here are some highlights:
- 122% dollar-based net expansion
- Mission critical and very sticky
- Category-defining product and dominant market position
- Nearly a $2 billion in gross profit run rate
- Will begin to produce FCF in Q1 (my est.) with massive operating leverage ahead
Despite the stock price being in an extended tailspin, this is a business that is continuing to get stronger and is likely to produce exceptional returns for shareholders. I am long $TWLO and added to my position on today's weakness.
Please give this a read and consider subscribing if you like it!
exitvelocity.substack.com
Twilio: The Pendulum Swings Both Ways
Twilio stock is completely untethered from fundamentals, presenting opportunity. A deep dive into this polarizing enterprise.
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