Twilio (NYSE:TWLO) versus Affirm (NASDAQ:AFRM) Financial Review

Affirm (NASDAQ:AFRM) and Twilio (NYSE:TWLO) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Profitability

This table compares Affirm and Twilio’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Affirm	7.60%	8.83%	2.45%
Twilio	0.67%	3.93%	3.19%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Affirm and Twilio, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Affirm	0	8	19	2	2.79
Twilio	2	4	18	2	2.77

Affirm currently has a consensus price target of $83.76, indicating a potential upside of 31.95%. Twilio has a consensus price target of $154.09, indicating a potential upside of 9.55%. Given Affirm’s stronger consensus rating and higher probable upside, research analysts clearly believe Affirm is more favorable than Twilio.

Volatility and Risk

Affirm has a beta of 3.63, suggesting that its share price is 263% more volatile than the S&P 500. Comparatively, Twilio has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500.

Valuation and Earnings

This table compares Affirm and Twilio”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Affirm	$3.72 billion	5.69	$52.19 million	$0.81	78.37
Twilio	$5.07 billion	4.21	$33.83 million	$0.19	740.28

Affirm has higher earnings, but lower revenue than Twilio. Affirm is trading at a lower price-to-earnings ratio than Twilio, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

69.3% of Affirm shares are held by institutional investors. Comparatively, 84.3% of Twilio shares are held by institutional investors. 11.0% of Affirm shares are held by insiders. Comparatively, 4.5% of Twilio shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Affirm beats Twilio on 10 of the 14 factors compared between the two stocks.

About Affirm

Affirm Holdings, Inc. operates a platform for digital and mobile-first commerce in the United States, Canada, and internationally. The company's platform includes point-of-sale payment solution for consumers, merchant commerce solutions, and a consumer-focused app. Its commerce platform, agreements with originating banks, and capital markets partners enables consumers to pay for a purchase over time with terms ranging up to 60 months. The company has active merchants covering small businesses, large enterprises, direct-to-consumer brands, brick-and-mortar stores, and companies with an omni-channel presence. Its merchants represent a range of industries, including sporting goods and outdoors, furniture and homewares, travel and ticketing, apparel, accessories, consumer electronics, and jewelry. Affirm Holdings, Inc. was founded in 2012 and is headquartered in San Francisco, California.

About Twilio

Twilio Inc., together with its subsidiaries, provides customer engagement platform solutions in the United States and internationally. It operates through two segments, Twilio Communications and Twilio Segment. The company provides various application programming interfaces and software solutions for communications between customers and end users, including messaging, voice, email, flex, marketing campaigns, and user identity and authentication. It also offers software products to build direct, personalized relationships with their end users, such as segment, a platform that provides tools for first-party data by unifying real-time information collected; and engage, an automation platform for the delivery of omnichannel campaigns. Twilio Inc. was incorporated in 2008 and is headquartered in San Francisco, California.