Valuation and Other Thoughts
For those who don't know what TWLO does...
Twilio is a communication platform service developers can use to facilitate communication in 180 countries. TWLO provides the building blocks that enable individuals or enterprises to integrate real-time omnichannel communication tools into business applications. Twilio operates as the back-end communications infrastructure for companies and provides easy to use APIs and software development kits to allow integration with a customer’s applications. Simple examples of such integrations include enabling two factor authentication for a website or enabling push notification to remind customers about a dinner reservation.
11/17/2020: Twilio is growing quite fast (51.8% YoY growth rate); however, it's valuation surely prices that in with a 21.8 Price to Sales ratio (any P/S ratios over 10-15 are quite pricey). I am generally willing to pay up for growth; however, TWLO's revenue growth rate, which is great right now, is declining each new quarterly report.
Overall, Twilio, which is priced as a growth company, will behave as a growth company. Its stock will rise as long at revenue growth stays robust. However, any sign of revenue deceleration will surely cause a substantial pull back. If I had a position in TWLO and was riding massive gains, I'd let it ride. However, I'd be hesitant to put new money behind this name at current valuations.