Shares of Twilio (TWLO) are on the rise on Thursday after the cloud communications company reported stronger than expected quarterly results, with a surprise adjusted profit. Following the news, several Wall Street analysts raised their price targets on the stock, with Piper Sandler analyst Brent Bracelin saying that the accelerating growth reinforces his bullish view on the 3- to 5-year growth prospects and confidence in the Segment combination as having "game-changing" potential.

RESULTS: Twilio reported fourth-quarter adjusted earnings per share 4c, which was better than the expected (8c) in losses per share. The company also reported fourth-quarter revenue $548.1M, above consensus at $454.75M. "Twilio's 65% year-over-year total revenue growth in the fourth quarter continued the strength and momentum we saw throughout an outstanding year of results in which we delivered $1.76 billion in revenue," said Jeff Lawson, Twilio's Co-Founder and CEO. For the first quarter, Twilio sees adjusted losses per share of (12c)-(9c) and revenue of $526M-$536M, with consensus at (2c) and $492.08M, respectively.

Twilio also announced that Karyn Smith, who has served as its Chief Legal Officer since September 2014, has informed the company of her decision to leave. To ensure an orderly transition and continuity of operations, Smith will continue to serve as Chief Legal Officer until her successor is found and has moved into the role.

ACCELERATING GROWTH: Piper Sandler analyst Brent Bracelin raised the firm's price target on Twilio to $550 from $475, while reiterating an Overweight rating on the shares following the company's "strong" fourth-quarter results. Digital, political, and Segment tailwinds contributed to a $93M revenue beat on 65% year-over-year growth, Bracelin told investors in a research note. The analyst believes the accelerating growth reinforces his bullish view on the 3- to 5- year growth prospects and confidence in the Segment combination as having "game-changing" potential. Twilio remains a top cloud software franchise to own for 2021, Bracelin added.

Following the company's better-than-expected fourth-quarter results, KeyBanc analyst Alex Kurtz also raised the firm's price target on Twilio to $550 from $420 on higher estimates and rolling forward valuation to fiscal year 2022. Kurtz sees Twilio as a premium growth asset with solid visibility to 30%-plus growth over the next several years as a key enabler of digital acceleration with strong revenue retention rates of 139%. He has an Overweight rating on the shares.

Cowen analyst J. Derrick Wood increased his price target on Twilio to $540 from $440, while keeping an Outperform rating on the shares. The price target increase comes following its "blowout" quarter, the analyst noted, adding that even with guidance, numbers look conservative as the company appears set up for continued beat and raises.

Meanwhile, Wells Fargo analyst Michael Turrin raised the firm's price target on Twilio to $525 from $450 and kept an Overweight rating on the shares. The analyst noted that Twilio's growth profile continues to achieve "rare air," with fourth-quarter revenue accelerating and well ahead of where most investors were expecting. While no longer providing an annual outlook, the first quarter guide implies revenue modestly up sequentially, which Turrin thinks also leaves room for upside given an extra month of Segment contribution and recent string of outsized quarterly beats.

Voicing a similar opinion, JMP Securities analyst Patrick Walravens raised his price target on Twilio to $510 from $360 and maintained an Outperform rating on the shares. Walravens continues to like the business under the leadership of CEO Jeff Lawson, citing the management decision to organize the company into smaller teams and highlighting Twilio's "huge total addressable market."

Canaccord, Macquarie, Needham, Mizuho, JPMorgan, and Northland also raised their price targets on Twilio's shares. They all have Buy-equivalent ratings on the name.

PRICE ACTION: In morning trading, shares of Twilio have gained almost 9% to $447.31.