Shares could slip to their lowest level since July 2018
Twilio Inc (NYSE:TWLO) is up 1.5% to trade at $69.80 at last check, but there's several reasons why investors should steer clear of the communications software name for now. The equity is just off an Oct. 13, two-year low of $62.10, and carries an 80.9% year-over-year deficit. Worst yet, it does not look like Twilio stock will be able to bounce back any time soon, given the security is currently within striking distance of a trendline that has historically pressured TWLO lower.
Specifically, Twilio stock is within striking distance of its 40-day moving average, which has acted as pressure for the better part of the last 12 months. According to Schaeffer's Senior Quantitative Analyst Rocky White's last study, TWLO has seen six similar signals over the past three years, and was lower one month later 83% of the time, averaging an 18.6% loss. A move of similar magnitude would place TWLO below $57 for the first time since July 2018.
A shift in analyst sentiment could make things even worse for the shares. Of the 23 firms in coverage, 16 call the stock a "strong buy," while the 12-month consensus target price of $122.25 is a 74.5% premium to current levels. This leaves plenty of room for price-target cuts and/or downgrades moving forward.