Twilio, DocuSign, Zoom Stocks: Acquisition Targets for 2025 News ad

The combination of a new cycle of lower interest rates and a rising stock market will create a fertile environment for more mergers and acquisitions in 2025. Lower interest rates will make it cheaper to finance foreclosures, and a rising stock market will increase buyers’ purchasing power. using your shares in transactions. The new Trump administration, with its initiatives to rein in government bureaucracy and loosen regulations, could also ease the hurdles for companies seeking to merge. Here are three stocks in the computer and technology sector that are realistic targets for buying in 2025.

Twilio: A Communications Platform to Further Improve Collaboration and CX Journeys

Communications technology provider Twilio Inc. New York Stock Exchange: TWLO allows companies to add and improve communications features, including voice, messaging and video, to their applications. The company is a leading communications as a platform (CPaaS) provider that has enhanced its technology with artificial intelligence (AI). The CustomerAI platform, which includes AI-enhanced features such as a traffic optimization engine, voice intelligence, fraud protection, branded calling, and SendGrid experience, has accelerated its growth trajectory, pushing the stock to a 52-week high. The company is approaching GAAP profitability, but shares may be priced in the $107 range. The CPaaS market is projected to grow 15.8% from 2022 to 2026.

Solid Q3 and Upside Guidance Bolsters Premium

In its third-quarter 2024 earnings report, Twilio reported non-GAAP earnings per share of $1.02, beating the consensus estimate by 15 cents. GAAP losses were reduced to $5 million.

Revenue grew 9.7% YoY to $1.13 billion, well ahead of analysts’ consensus estimate of $1.09 billion. As of September 30, 2024, Twilio had more than 320,000 active accounts.

For the fourth quarter, Twilio issued guidance for growth of 95 cents to $1.00 versus the consensus estimate of 88 cents. Revenue is expected to be between $1.15 billion and $1.16 billion, versus the consensus estimate of $1.15.

Potential acquirers: MSFT, AMZN, CRM.

Hyperscalers are potential buyers because they can integrate Twilio’s cloud communications platforms into their services and infrastructure. Microsoft Company NASDAQ: MSFT can integrate Twilio’s service and CPaaS platform into its Azure cloud platform and Teams collaboration software. Amazon.com Inc. NASDAQ: AMZN can also integrate the Twilio platform into its AWS platform and e-commerce ecosystems. Salesforce Inc. New York Stock Exchange: CRM is a viable acquisition partner that could integrate Twilio into its customer relationship management (CRM) platform.

DocuSign: E-Signature Pioneer Expands Document Creation and CLM Capabilities

The Covid-19 pandemic has been a boon for DocuSign Inc. NASDAQ: DOCUMENT as lockdowns and social distancing measures accelerated the adoption of electronic signatures. The transition remained challenging as businesses continued to use and comply with electronic signatures to save time and money and simplify contract closures.

DocuSign has logically expanded its services to include contract lifecycle management (CLM) and document creation, and expanded them with workflow automation and generative AI collaboration capabilities.

DocuSign refutes its forecasts

DocuSign reported second-quarter fiscal 2025 earnings per share of 97 cents, beating the consensus estimate by 12 cents. Revenue rose 7% YoY to $736.03 million, beating consensus estimates of $727.2 million.

Billings grew 2% YoY to $724.5 million, compared with previous estimates of $7.15 to $7.25 million. Non-GAAP profit margin rose to 32.2%, beating the previous forecast of 27-28% and profitability of 24.7% in the last year period.

DocuSign raised its third-quarter revenue guidance to $743 million to $747 million, compared to analysts’ consensus estimate of $739.50 million. It raised its fiscal 2025 revenue guidance to $2.940 million to $2.93 billion, compared to consensus forecast at $2.93 billion.

Potential acquirers: MSFT, AMZN, ORCL.

The company remains very relevant and attractive—attractive enough to be a worthwhile acquisition for a larger player looking to expand its collaboration capabilities. Microsoft and Amazon are potential buyers that could offer electronic signature and CLM capabilities on their Azure and AWS cloud platforms. Oracle Company. New York Stock Exchange: ORCL is another hyperscaler that can add DocuSign functionality to its Oracle Cloud and enterprise offerings.

Zoom: Video Conferencing and Collaboration Suite

The biggest benefactor from the COVID-19 pandemic was Zoom Communications Inc. NASDAQ: ZMas the world has embraced video calling and conferencing technology. The company posted triple-digit growth in both revenue and share price, reaching a staggering $588.84 per share.

However, the subsequent 90% drop was just as astounding (tears) as normalization began as the pandemic moved into the rearview mirror. Growth has begun to resume again in the singles business, and its share price is up 14.9% year to date (YTD) as of December 3, 2024. The company focused on growing its enterprise business and added collaboration capabilities and generative artificial intelligence. its video software to create a complete ecosystem of collaborative workflows.

Recovery will accelerate in the third quarter

Zoom reported third-quarter earnings per share of $1.38, beating estimates by 7 cents. Revenue grew 3.6% YoY to $1.18 billion, beating consensus estimates of $1.16 billion. Enterprise revenue rose 5.8% YoY to $698.9 million, with revenue up for 100,000 ARR customers by 7.1% year on year.

Zoom has more than 320,000 active customer accounts, up from 306,000 last year. Zoom repurchased 4.4 million shares during the quarter and increased its total authorized share repurchase by $1.2 billion. Thus, the total amount of the repurchase authorization will be $2 billion.

Zoom raised its fourth-quarter earnings per share forecast to $1.29 to $1.30, versus consensus estimates of $1.28. Zoom expects revenue of $1.75 billion to $1.18 billion, versus analyst consensus estimates of $1.17 billion.

Potential acquirers: MSFT, GOOGL, CRM, AMZN.

While many hyperscalers have video conferencing capabilities, they could improve this with Zoom technology, perhaps more streamlined and easier to implement for the end user. Microsoft could improve its Teams platform with Zoom video technology and a comprehensive collaboration suite. Alphabet Inc. NASDAQ: GOOGLE Google could improve its clunky Google Meet video conferencing software to strengthen its position. Salesforce could enhance its CRM platform for customer engagement and virtual meetings with Zoom video conferencing technology, which is more streamlined and perhaps easier to use than Amazon Chime, the default video service.

One advantage Zoom has over the aforementioned acquisition targets is its $7.5 billion in cash and cash equivalents, which is nearly 25% of its market capitalization. This makes the company more attractive to acquire because financing is easier and the net cost of acquisition is lower.

Before you consider Twilio, you should hear this.

MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts were quietly telling their clients to buy now, before the broader market caught on… and Twilio wasn’t on the list.

While Twilio currently has a Hold rating among analysts, the top-rated analysts think these five stocks are Strong Buys.

View five stocks here

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