BAND Stock Overview
Bandwidth Inc. operates as a cloud-based software-powered communications platform-as-a-service (CPaaS) provider in the United States.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$11.90|
|52 Week High||US$92.63|
|52 Week Low||US$11.28|
|1 Month Change||-17.19%|
|3 Month Change||-39.63%|
|1 Year Change||-86.40%|
|3 Year Change||-82.18%|
|5 Year Change||n/a|
|Change since IPO||-43.84%|
Recent News & Updates
GoTo selects Bandwidth as primary communications platform to power global growth
Bandwidth (NASDAQ:BAND) expanded partnership with GoTo, the all-in-one solution for business communications and IT support. "GoTo's vision is to empower our customers to get work done anywhere, at any time, without disruption–and we trust Bandwidth to be a key part of achieving that vision. Bandwidth has the enterprise-grade capabilities and telecom expertise to grow with us as we expand into new geographies and scale with rising customer demand, while delivering on our goal of near 100 percent uptime performance." said Paddy Srinivasan, CEO.
Bandwidth: Buy For Value
Shares of Bandwidth have continued to crumble after the company reported relatively lackluster fiscal Q2 results. The company's growth was impacted by the departure of two large customers as well as lingering impacts from last year's DDoS attack. Bandwidth's customer counts also stopped growing. However, there are positive bright spots, including an uptick in gross margins. Trading at just north of 1x revenue, Bandwidth is one of the cheapest stocks in the software sector and is ripe for consolidation. As we look ahead to a potential year-end rebound, there are still plenty of tech stocks that are sitting deeply underwater year-to-date, despite the strong risk-on rally that we've seen over the past few months. I continue to err on the side of value-oriented tech, which I think will outperform as valuations stretch back and rebound closer to historical norms. Bandwidth (BAND), in particular, is one name that deserves a close second look. A distant competitor to Twilio (TWLO), Bandwidth has been in trouble over the past year as its growth rates lagged - especially as the company suffered an isolated DDoS attack that led to some customer attrition and loss of revenue. Year to date, shares of Bandwidth have shed more than 75% of their value. And though the market seems to have lost all hope for this name, I still think there is value to be squeezed out of this recurring-revenue business. BAND data by YCharts I remain bullish on Bandwidth. While I agree that the business certainly comes with risk, especially with the customer attrition that we saw this quarter, I do think Bandwidth remains a ripe opportunity for consolidation in its industry - particularly as CPaaS providers rely on economies of scale to boost margins and profitability. Twilio, with its ~$4 billion of net cash on its balance sheet, could acquire Bandwidth in a heartbeat. And though a lot of pessimism has descended on Bandwidth recently, it's good to highlight the bullish drivers that still exist for this name: Growth and profitability, not to mention value, in one neat package- Bandwidth is a haven for safety-oriented investors. It balances mid-teens revenue growth alongside a positive adjusted EBITDA margin (which continues to see expansion potential). The CPaaS space isn't as competitive as other areas of enterprise software- You can name dozens of different CRM or HCM companies. This isn't true of Bandwidth's space. Bandwidth and Twilio are by far the most recognizable names in the space, followed by smaller startups like Nexmo. Bandwidth's ability to corner this market is far better than an enterprise software company in a more tightly competitive arena. CPaaS naturally lends itself to expansion- Bandwidth's dollar-based net expansion rates are healthy in the ~115% range. The fact that all of its pricing is usage-based means that as its customers (Internet companies) grow their own usage and website/app visitors, Bandwidth's revenue will increase without the company having to lift a finger. Use cases are varied and growing- The diversity of Bandwidth's client base is a testament to how broadly applicable its product is. For example, Google (GOOG) (GOOGL) is a Bandwidth client, using Bandwidth voice to give its Internet calling capabilities to businesses and consumers. Arlo (ARLO), the security camera company, uses Bandwidth's 911 access company to connect its customers with local emergency departments. Zoom (ZM) has its conferencing platform powered by Bandwidth Voice. Opportunity for product category expansion- Twilio extended its growth potential by adding new products like call-center operations software. To date, Bandwidth has stuck to its core voice-and-text capabilities, so adding additional features opens up even more growth for Bandwidth down the road. Valuation, of course, remains incredibly modest. At current share prices near $16, Bandwidth trades at just a $414 million market cap. After we net off the $302.9 million of cash and $636.5 million of debt on Bandwidth's most recent balance sheet, the company's resulting enterprise value is $748 million. This puts Bandwidth's valuation at just 1.3x EV/FY22 revenue against the company's $551-$557 million revenue range for the current fiscal year (12-13% y/y growth, and unchanged from its prior guidance): Bandwidth outlook (Bandwidth Q2 earnings deck) To me, I'm not invested in Bandwidth because I believe it is an exceptional-quality company or because it has superior growth drivers to take it to the next level. The merit in Bandwidth is in the fact that it has a relatively sticky customer base built on top of reasonably high gross margins, which should be attractive assets to potential acquirers. At just over 1x forward revenue, Bandwidth is worth a small bet. Q2 download Let's now go through Bandwidth's latest Q2 results in greater detail. The Q2 earnings summary is shown below: Bandwidth Q2 results (Bandwidth Q2 earnings deck) In Q2, Bandwidth grew revenue at a 13% y/y pace to $136.5 million, slightly beating Wall Street's expectations of $134.1 million (+11% y/y) by a two-point margin. Revenue growth also decelerated three points relative to 16% y/y growth in Q1. The chart below does a good job at explaining the company's recent growth drivers and headwinds. Bandwidth's core messaging and voice products are still seeing organic growth; however, this was offset by lingering impacts from last year's DDoS attacks plus the exit of two major customers. Bandwidth revenue drivers (Bandwidth Q2 earnings deck) We should also note, unfortunately, that Bandwidth's overall customer count also showed a rare dip in Q2, down by 10 customers to 3,362 total: Bandwidth customer trends (Bandwidth Q2 earnings deck) The company noted that customer additions in Q1 were higher y/y, but the overall reduction in customer counts was driven by "non-regrettable churn" in smaller customers, the majority of which have less than $5,000 in annual spend (for reference here, the average Bandwidth customer spends $161k annually).
|BAND||US Telecom||US Market|
Return vs Industry: BAND underperformed the US Telecom industry which returned -36.2% over the past year.
Return vs Market: BAND underperformed the US Market which returned -23.2% over the past year.
|BAND Average Weekly Movement||12.1%|
|Telecom Industry Average Movement||6.1%|
|Market Average Movement||6.8%|
|10% most volatile stocks in US Market||15.5%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: BAND is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 12% a week.
Volatility Over Time: BAND's weekly volatility (12%) has been stable over the past year, but is still higher than 75% of US stocks.
About the Company
Bandwidth Inc. operates as a cloud-based software-powered communications platform-as-a-service (CPaaS) provider in the United States. The company operates in two segments, CPaaS and Other. Its platform enables enterprises to create, scale, and operate voice or messaging communications services across various mobile applications or connected devices.
Bandwidth Fundamentals Summary
|BAND fundamental statistics|
Is BAND overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|BAND income statement (TTM)|
|Cost of Revenue||US$299.42m|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||-1.11|
|Net Profit Margin||-5.37%|
How did BAND perform over the long term?See historical performance and comparison
Is BAND undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 5/6
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for BAND?
Other financial metrics that can be useful for relative valuation.
|What is BAND's n/a Ratio?|
Price to Sales Ratio vs Peers
How does BAND's PS Ratio compare to its peers?
|BAND PS Ratio vs Peers|
|Company||PS||Estimated Growth||Market Cap|
SIFY Sify Technologies
CRGE Charge Enterprises
LILA Liberty Latin America
Price-To-Sales vs Peers: BAND is good value based on its Price-To-Sales Ratio (0.6x) compared to the peer average (0.6x).
Price to Earnings Ratio vs Industry
How does BAND's PE Ratio compare vs other companies in the US Telecom Industry?
Price-To-Sales vs Industry: BAND is good value based on its Price-To-Sales Ratio (0.6x) compared to the US Telecom industry average (1.2x)
Price to Sales Ratio vs Fair Ratio
What is BAND's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PS Ratio||0.6x|
|Fair PS Ratio||1.4x|
Price-To-Sales vs Fair Ratio: BAND is good value based on its Price-To-Sales Ratio (0.6x) compared to the estimated Fair Price-To-Sales Ratio (1.4x).
Share Price vs Fair Value
What is the Fair Price of BAND when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: BAND ($11.9) is trading below our estimate of fair value ($80.32)
Significantly Below Fair Value: BAND is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.
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How is Bandwidth forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: BAND is forecast to remain unprofitable over the next 3 years.
Earnings vs Market: BAND is forecast to remain unprofitable over the next 3 years.
High Growth Earnings: BAND is forecast to remain unprofitable over the next 3 years.
Revenue vs Market: BAND's revenue (12.6% per year) is forecast to grow faster than the US market (7.7% per year).
High Growth Revenue: BAND's revenue (12.6% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: BAND's Return on Equity is forecast to be low in 3 years time (14.1%).
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How has Bandwidth performed over the past 5 years?
Past Performance Score0/6
Past Performance Score 0/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: BAND is currently unprofitable.
Growing Profit Margin: BAND is currently unprofitable.
Past Earnings Growth Analysis
Earnings Trend: BAND is unprofitable, and losses have increased over the past 5 years at a rate of 64.9% per year.
Accelerating Growth: Unable to compare BAND's earnings growth over the past year to its 5-year average as it is currently unprofitable
Earnings vs Industry: BAND is unprofitable, making it difficult to compare its past year earnings growth to the Telecom industry (-34.4%).
Return on Equity
High ROE: BAND has a negative Return on Equity (-12.82%), as it is currently unprofitable.
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How is Bandwidth's financial position?
Financial Health Score3/6
Financial Health Score 3/6
Short Term Liabilities
Long Term Liabilities
Stable Cash Runway
Forecast Cash Runway
Financial Position Analysis
Short Term Liabilities: BAND's short term assets ($404.6M) exceed its short term liabilities ($101.7M).
Long Term Liabilities: BAND's short term assets ($404.6M) do not cover its long term liabilities ($702.8M).
Debt to Equity History and Analysis
Debt Level: BAND's net debt to equity ratio (151.7%) is considered high.
Reducing Debt: BAND's debt to equity ratio has reduced from 822.9% to 289.5% over the past 5 years.
Cash Runway Analysis
For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.
Stable Cash Runway: BAND has sufficient cash runway for more than 3 years based on its current free cash flow.
Forecast Cash Runway: Insufficient data to determine if BAND has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.
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What is Bandwidth current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
|Bandwidth Dividend Yield vs Market|
|Market Bottom 25% (US)||1.7%|
|Market Top 25% (US)||4.7%|
|Industry Average (Telecom)||7.2%|
|Analyst forecast in 3 Years (Bandwidth)||0%|
Notable Dividend: Unable to evaluate BAND's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate BAND's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if BAND's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if BAND's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as BAND has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
David Morken (53 yo)
Mr. David A. Morken serves as an Advisor of Sovereign's Capital. Mr. Morken is also a Co-Founder, Chairman of the board of directors of Relay, Incorporated (formerly Republic Wireless, Inc.). Mr. Morken se...
CEO Compensation Analysis
|David Morken's Compensation vs Bandwidth Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$3m||US$471k|
|Sep 30 2021||n/a||n/a|
|Jun 30 2021||n/a||n/a|
|Mar 31 2021||n/a||n/a|
|Dec 31 2020||US$4m||US$450k|
|Sep 30 2020||n/a||n/a|
|Jun 30 2020||n/a||n/a|
|Mar 31 2020||n/a||n/a|
|Dec 31 2019||US$2m||US$375k|
|Sep 30 2019||n/a||n/a|
|Jun 30 2019||n/a||n/a|
|Mar 31 2019||n/a||n/a|
|Dec 31 2018||US$1m||US$375k|
|Sep 30 2018||n/a||n/a|
|Jun 30 2018||n/a||n/a|
|Mar 31 2018||n/a||n/a|
|Dec 31 2017||US$2m||US$375k|
|Sep 30 2017||n/a||n/a|
|Jun 30 2017||n/a||n/a|
|Mar 31 2017||n/a||n/a|
|Dec 31 2016||US$931k||US$375k|
Compensation vs Market: David's total compensation ($USD3.38M) is about average for companies of similar size in the US market ($USD2.94M).
Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.
Experienced Management: BAND's management team is considered experienced (2 years average tenure).
Experienced Board: BAND's board of directors are considered experienced (5.9 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: BAND insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
|13 Sep 22||SellUS$50,505||Lukas Roush||Individual||3,182||US$15.87|
|08 Aug 22||BuyUS$162,500||Lukas Roush||Individual||10,000||US$16.25|
|13 Jun 22||BuyUS$158,800||Anthony Bartolo||Individual||10,000||US$15.88|
|17 May 22||BuyUS$188,800||Anthony Bartolo||Individual||10,000||US$18.88|
|08 Mar 22||BuyUS$274,292||Brian Bailey||Individual||10,000||US$27.43|
|28 Feb 22||BuyUS$299,931||Daryl Raiford||Individual||9,760||US$30.75|
|28 Feb 22||BuyUS$92,336||Richard Asbill||Individual||3,000||US$30.78|
|22 Nov 21||SellUS$39,560||Lukas Roush||Individual||584||US$67.74|
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Bandwidth Inc.'s employee growth, exchange listings and data sources
- Name: Bandwidth Inc.
- Ticker: BAND
- Exchange: NasdaqGS
- Founded: 2000
- Industry: Alternative Carriers
- Sector: Telecom
- Implied Market Cap: US$301.117m
- Shares outstanding: 25.30m
- Website: https://www.bandwidth.com
Number of Employees
- Bandwidth Inc.
- 900 Main Campus Drive
- Suite 500
- North Carolina
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|BAND||NasdaqGS (Nasdaq Global Select)||Yes||Class A Common Stock||US||USD||Nov 2017|
|5XB||DB (Deutsche Boerse AG)||Yes||Class A Common Stock||DE||EUR||Nov 2017|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/10/02 00:00|
|End of Day Share Price||2022/09/30 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.