Shares of Twilio (TWLO) are on the rise after Oppenheimer analyst Ittai Kidron initiated coverage of the stock with an Outperform, a Buy-equivalent rating, saying he expects the company to experience “strong growth” for the foreseeable future.

BACKGROUND: Twilio is a Communications Platform-as-a-Service, or CPaaS, vendor. The company’s platform allows developers to embed voice, messaging, video, and authentication capabilities directly into their applications through its easy-to-use application programming interfaces, or APIs. Twilio came public earlier this year.

‘STRONG GROWTH’ AHEAD: Oppenheimer’s Kidron started coverage of Twilio with an Outperform rating and $50 price target, saying he believes the company is likely to experience “strong growth” for the foreseeable future as it benefits from rapid adoption of application-to-person, or A2P, communication in modern and legacy applications, and from cloud-based platforms becoming the primary way by which applications incorporate A2P communication. Additionally, Kidron pointed out that the CPaaS market is large and growing rapidly, and he sees Twilio continuing to leverage a successful developer focused “land-and-expand” sales model, penetrating traditional enterprises, and expanding outside of the U.S. Moreover, the analyst told investors in a research note that these factors may help drive upside to consensus expectations. While the company’s shares may appear expensive, Kidron noted that a comparison to past high-growth peers suggests longer term potential is still undervalued.

WHAT’S NOTABLE: According to Bloomberg data, from the eleven major research firms that currently cover the stock, Oppenheimer’s $50 price target on Twilio shares is the highest, topping all others by at least $10.

PRICE ACTION: In morning trading, shares of Twilio have gained 4.8% to $35.77. However, the stock has dropped over 44% in the last month. The stock hit an all-time high of just under $70 per share in late September.