The cloud computing industry is expected to expand at a CAGR of 17.5% over the next five years, hitting $832.10 billion by 2025. The expansion of remote work and entertainment activities that has been driven by lockdown conditions necessitated by the COVID-19 pandemic, have accelerated industry’s growth. While coronavirus vaccine deployment has led to a temporary pullback by cloud computing stocks, a renewed lockdown regime in the U.K., and…
the news that a second, more contagious, strain of COVID-19 is now in the U.S., have renewed investor optimism.
However, concomitant with its rapid growth last year, the cloud computing industry has become more vulnerable to cyberattacks and malware, and with that an increased risk of sensitive data being stolen or leaked. In the light of a recent cyberattack on several U.S. government agencies–which is deemed to be the largest such attack in history–most companies are now switching to cloud computing platforms that are perceived as “reliable” to secure their information.
Companies such as Twilio Inc. (TWLO – Get Rating), Veeva Systems Inc. (VEEV – Get Rating) and Nutanix, Inc. (NTNX – Get Rating) are among the global cloud computing companies that offer secure and versatile platforms that suite most business models. These companies have proven track records of secure data storage and transmission, making them among the most coveted platforms by businesses. As such, we think these companies are well-positioned to deliver higher revenues and earnings soon, which should drive their stock prices higher.
Twilio Inc. (TWLO – Get Rating)
TWLO is a cloud communications platform that facilitates developers’ ability to build, scale and enable communications within software applications. The company offers three distinct software services – Programmable Communications Cloud, Super Network and Business Model for Innovators, with an international market reach.
On November 2, TWLO acquired customer data platform, Segment, in exchange for $3.20 billion of TWLO class A stock. This acquisition provides TWLO the opportunity to enhance its customer engagement services by integrating digital engagement platforms in its software portfolio.
Earlier, in September, the company expanded its internet of Things (IoT) offerings by launching Microvisor connectivity and a device management platform. This should allow TWLO to capitalize on current, disruptive industry trends, thereby emerging as a market leader in this space.
TWLO’s revenues have increased 52% year-over-year to $448 million in the third quarter ended September 30, 2020. Its non-GAAP income from operations has risen 302.8% from negative year-ago values to $7.30 million. The company’s active customer accounts have increased 21% from the same period last year to more than 208,000 as of September 30.
TWLO’s EPS is expected to rise at a rate of 20.5% per annum over the next five years. The company has an impressive earnings surprise history as well; it beat the Street EPS estimates in each of the trailing four quarters. A consensus revenue estimate of $454.20 million for the fourth quarter ended December 31, 2020 represents a 37.1% rise year-over-year.
TWLO has gained more than…
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