2 Sides To The Twilio Coin: JMP Securities Maintains Outperform Rating

After attending day one of the developer conference SIGNAL in San Francisco held this week, JMP Securities is reiterating its Market Outperform rating on API provider Twilio, Inc
(NYSE: TWLO).

“The good news is that we believe Twilio is doing the right things to win in this category,” said JMP Securities analysts Patrick Walravens and Mathew Spencer.

Good News, Bad News

The analyst mentioned four reasons Twilio is positioned to win:

1. "Building high-quality, reliable API services that have 99.999 percent availability and have resulted in nearly 30,000 production deployments."
2. "Listening to its customers to build higher-value APIs that solve customer’s problems but are also stickier than lower-lower APIs.
3. "Introducing new feature and products at a rate of one every 3.5 days, a rate competitors will be hard-pressed to match."
4. "Rapidly adding developers to its community, including 600,000 in the last 12 months."

There was some bad news for the company, however, particularly from Airbnb, a key customer of Twilio, which stated that it is working on the same kind of multi-sourcing strategy that led Uber to significantly reduce its spending on Twilio in the first quarter. This is the same multi-sourcing strategy that Facebook Inc (NASDAQ: FB)'s WhatsApp uses as well.

JMP Securities maintains a $33 price target on Twilio.

At time of publication, shares of Twilio were down 4.49 percent on the day at $24.88.

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