Ticker Reports for February 14th
Up 50% in January, Twilio's Pullback Is the Time to Buy
Twilio’s (NYSE: TWLO) pullback is the time to buy this stock because it offers an opportune discount in a high-quality tech-growth stock with AI and automation exposure. The stock price rose by 50% in January, extending a trend that began in 2024 and was driven by reinvigorated growth and accelerating results.
Although the FQ4 results and Q1 guidance are tepid relative to the expectations, they align with the trends and the bar was set high. The worst that can be expected is a stock price reset followed by higher prices later in the year. Because the company’s performance includes robust cash flow, healthy financial condition, and aggressive share repurchases, the rebound could come quickly, and fresh long-term highs could be set before mid-year.
Twilio: More Than a Customer Engagement Platform
Twilio is a customer engagement platform, but more so because it provides developer tools allowing businesses to create and manage custom communications applications. The Q4 results were tepid relative to expectations, but the 11% growth is 100% organic, driven by a 6.5% gain in client count and deepening penetration. More importantly, growth is accelerating compared to last quarter and year, with year-over-year acceleration expected in 2025. Regarding penetration, the company’s net expansion rate, AKA the net retention rate, also accelerated, rising by 400 bps to 106%, indicating increased leverage and potential for long-term growth.
“Customers like MarketBeat are able to benefit from Twilio's streamlined approach to development on a single messaging API and our universal template management system,” said Twilio CEO Khozema Shipchandler. A MarketBeat spokesperson added that Twilio excels in its services.
Margin news is mixed but aligns with the long-term outlook for sustained growth and improving profitability. The company’s margin was slightly weaker than expected, impacted by a bad debt write-off, leaving the GAAP and adjusted EPS below forecasts. However, the company recorded its first quarter of GAAP profits, GAAP profitability is expected to improve, and adjusted income from ops rose at a leveraged pace compared to revenue, 14%. The critical details are that cash flow and FCF were hit hardest by the write-off, which is not expected to be repeated soon and has little impact on the company’s financial health or capital return.
Likewise, the guidance is solid, if less than analysts had hoped. The company reiterated its outlook for the year while initiating below-consensus guidance for Q1. The takeaway is that Q1 revenue is expected to grow at a high-single-digit pace, which is expected to be sustained through the year’s end. The guidance may be cautious due to client growth, penetration, and AI/automation trends, which are all positive.
Twilio's Balance Sheet, Cash Flow, and Capital Return are Robust
Twilio’s cash flow and balance sheet allowed aggressive share repurchases in 2024 and will sustain them in 2025. The share count was reduced by nearly 10% for the year, completing the previous $3 billion authorization. A new $2 billion authorization ensures the count will decline in 2025, and other sell-side activity is bullish.
Analyst and institutional trends support the updraft in the stock price, including increased coverage, a rising price target, positive revisions after the Q1 guidance was released, and institutions buying on balance. The institutional activity is noteworthy because it spiked in Q1 2025 as profit-takers sold into the rally, but more shares were accumulated than sold.
Twilio’s stock price pullback is a buying opportunity because of the technical setup and the results, which do not significantly alter the outlook. The technical setup shows a market in reversal; the price pullback is an expected test for support that the market will likely confirm. The critical support levels are near $135, $125, and $95.
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Apple-SpaceX Deal Sets Stage for Mode's Global Takeover
Breaking news:
Apple just secretly added Starlink satellite support to iPhones through iOS 18.3.
One of the biggest potential winners?
Mode Mobile.
Watch These 3 Stocks—High Short Interest and Big Upside Potential
There comes a time every once in a cycle when the market gets too invested in either a bullish or bearish view, and just like any other physical marketplace, the stock market can then trigger a major shift to the opposite end of this concentrated view. Investors can imagine the bottlenecks and mania that would be caused by this shift, which is why keeping track of sentiment gauges is so important.
When it comes to individual stocks, one of these gauges can be the amount of short interest or how many of the company’s shares are held in short positions. Now, short selling is a complex process of borrowing stock to sell (hence being short the stock), which would then involve buying back that same stock in order to close the position. This is why stocks with high short interest are important to watch since a turn to the upside could trigger massive buying activity.
That is what’s known as a “short squeeze,” where short-sellers hit the maximum amount of pain and are then forced to bail on their short positions, which, as explained, involves buying the stock. Today’s list of high short-interest stocks could set up investors for major runs to the upside, including names in the basic materials sector like Alcoa Co. (NYSE: AA), United States Steel Co. (NYSE: X), and even a retail stock like Best Buy Inc. (NYSE: BBY).
Why Alcoa Stock Could Squeeze Sellers Soon
Over the past month, manufacturing PMI data indicates that automotive demand is rebounding despite concerns over recent trade tariff announcements from President Trump. Investors see signs of recovery as the industry prepares for increased demand.
This is where Alcoa stock comes into play, as a major aluminum manufacturer and supplier riding on the tailwinds of the automotive expansion. This is a theme that some Wall Street analysts have already gotten behind on, as investors can see as recently as late January 2025.
Those from Bank of America have not only reiterated their buy rating for Alcoa stock but also decided to keep the company’s valuation at a high of $58 per share. This new view would call for the company to make a new 52-week high and suggest a net rally of as much as 60% from where it trades today.
Considering that Alcoa already trades at a low of 76% of its 52-week high, it would seem that the bears are at risk. They have run up the company’s short interest to a high of $301 million today. This can be the assumption since the upside seems much bigger than the potential move lower from here.
To sum up, investors can note the recent 0.6% boost in holdings in Alcoa stock from the Vanguard Group. While this may not seem like much on a percentage basis, it did bring their net position to a high of $981.5 million today, or 10% ownership in the company.
A Tariff Boost for United States Steel
While most would say that tariffs are bad for domestic manufacturers, others will realize that the need to diversify costs from trade could turn capacity demand inward, which is where domestic players like United States Steel could shine.
That might be the government's stance by blocking Japanese steelmaker Nippon Steel Co. (OTCMKTS: NISTF) from buying out United States Steel. Knowing that the company trades at 80% of its 52-week high, there is no incentive to sell, especially as the industry data starts to turn bullish again.
This is why, even though short interest remains high at $488 million today, up to 49% of this balance has contracted over the past month alone, a clear sign of bearish capitulation ahead of a potential breakout in the stock. The timing couldn’t have been better either, as Vanguard also built up a 9.1% stake in this stock, worth up to $698.8 million today.
Could Best Buy Return to Former Glory?
The current 7.2% short interest would say no, but then other factors would back up a potential run higher in Best Buy stock. One of them is the earnings per share (EPS) forecast coming out of Wall Street analysts for the fourth quarter of 2024, shooting as high as $2.69.
That would more than double the latest quarter’s $1.26 result, and considering that EPS is a major driver of stock prices, Best Buy should somewhat follow in this price action. Other analysts would share that view, given that Best Buy’s consensus price target is set to $101.7 per share, daring it to rally by 17.2% from where it trades today.
If the state of the consumer is a concern for investors today, then they can also look past this upside and into the stability offered through a $3.76 payout per share, which at today’s prices would translate to an annualized dividend yield of up to 4.33%.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
Apple-SpaceX Deal Sets Stage for Mode's Global Takeover
Breaking news:
Apple just secretly added Starlink satellite support to iPhones through iOS 18.3.
One of the biggest potential winners?
Mode Mobile.
Albemarle's Earnings Are In—Is the Stock a Buy Now?
Investors are typically – and justifiably – careful about investing in any given stock around the company’s earnings season since volatility is usually elevated for the days before, during, and after the financial announcements. However, every once in a while, the market will give out unmissable opportunities to make a swing for a given stock on its earnings announcements with very little relative risk.
Today’s opportunity comes filled with several tailwinds on both a fundamental and technical level, giving investors a chance they need to expose their portfolios to one of the best potential swings for this first-quarter earnings season, one that has already responded relatively well despite a not-so-great overall result on the part of the company. However, within what seems to be a bearish report, some found a gem to be had in the coming months.
This gem is found in shares of Albemarle Co. (NYSE: ALB), a lithium mining company with lots of upside potential according to the fundamentals behind the industry and mining in general and Wall Street analysts. Considering that the market is already reacting positively to the company's recent results, investors can see how the future might be brighter than it seems for Albemarle.
Why Albemarle Could See Higher Prices Ahead
Starting with the fundamentals, lithium prices in the open market seem to be at a cyclical low since the demand for electric vehicles has declined in recent months. However, recent manufacturing PMI data has shown investors that the mining industry might be on the verge of a turnaround.
With expansion readings, investors might be leaning toward looking into the Materials Select Sector SPDR Fund (NYSEARCA: XLB) companies like gold or silver. But, when it comes to lithium, there’s a specific tailwind blowing behind this chemical metal for the coming quarters, an international one with no end in sight.
Both the United States and China have been leading the way in increasing the share of electric vehicles operating within their cities. With this in mind, investors can point to the fact that over two-thirds of Albemarle’s sales come from China and that this segment is set to grow massively in the coming months.
More than that, the company’s earnings presentation notes that up to 25% growth in electric vehicle demand was reported in China, which accounts for over 60% of global demand. Being exposed to this growth and tailwind, Albemarle is very well positioned to continue into a stronger rest of 2025.
Now, despite missing revenue and earnings expectations, management is still expecting (forecasting, really) a breakeven level of free cash flow in the business and improvements in conversions from revenue to operating income. Plainly said, management is confident that Albemarle can still perform relatively well despite a tough operating environment for lithium.
The Market’s Take on Albemarle Stock
With all of these factors in mind, investors can see that Wall Street analysts and other market players remain optimistic about Albemarle's future. Starting with the broader Wall Street view, a recent $140 per share valuation from BMO Capital Markets would call for a net upside of as much as 82.8% from today’s price.
Because it already trades at a low level of 54% of its 52-week high, the stock offers a fantastic risk-to-reward ratio for investors to consider today moving forward, with double-digit upside and a seemingly strong support level as of where it trades today.
More than that, some willing buyers showed up for the company near its lows recently, such as those from the Vanguard Group, who decided to boost their holdings in Albemarle stock by 2.5% as of February 2025, bringing their net holdings up to $1.26 billion today, or 12.5% ownership in the company.
These bullish valuations are not the only way analysts are willing to express their bullishness for Albemarle stock today. They are also forecasting up to $2.18 in earnings per share (EPS), a massive swing from today’s net loss of $1.09 per share, reflecting the future potential state and demand of the lithium market and mining industry.
Ultimately, there is one last factor investors can take into consideration: the valuation discounts. At 0.9x on a price-to-book (P/B), this represents a steep discount to peers like Sociedad Quimica y Minera de Chile (NYSE: SQM), which is valued at 2.4x today.
All told, Albemarle stock could represent an attractive setup with fundamental tailwinds ready to push it higher by double-digits while only keeping the downside capped to a minimum.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
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