company background image
BAND

Bandwidth NasdaqGS:BAND Stock Report

Last Price

US$11.90

Market Cap

US$301.1m

7D

-0.5%

1Y

-86.4%

Updated

02 Oct, 2022

Data

Company Financials +
BAND fundamental analysis
Snowflake Score
Valuation5/6
Future Growth1/6
Past Performance0/6
Financial Health3/6
Dividends0/6

BAND Stock Overview

Bandwidth Inc. operates as a cloud-based software-powered communications platform-as-a-service (CPaaS) provider in the United States.

Bandwidth Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Bandwidth
Historical stock prices
Current Share PriceUS$11.90
52 Week HighUS$92.63
52 Week LowUS$11.28
Beta0.83
1 Month Change-17.19%
3 Month Change-39.63%
1 Year Change-86.40%
3 Year Change-82.18%
5 Year Changen/a
Change since IPO-43.84%

Recent News & Updates

Sep 15

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.

Aug 10

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).

Shareholder Returns

BANDUS TelecomUS Market
7D-0.5%-3.9%-2.5%
1Y-86.4%-36.2%-23.2%

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.

Price Volatility

Is BAND's price volatile compared to industry and market?
BAND volatility
BAND Average Weekly Movement12.1%
Telecom Industry Average Movement6.1%
Market Average Movement6.8%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

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

FoundedEmployeesCEOWebsite
20001,100David Morkenhttps://www.bandwidth.com

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

How do Bandwidth's earnings and revenue compare to its market cap?
BAND fundamental statistics
Market CapUS$301.12m
Earnings (TTM)-US$28.18m
Revenue (TTM)US$524.62m

0.6x

P/S Ratio

-10.7x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
BAND income statement (TTM)
RevenueUS$524.62m
Cost of RevenueUS$299.42m
Gross ProfitUS$225.20m
Other ExpensesUS$253.38m
Earnings-US$28.18m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-1.11
Gross Margin42.93%
Net Profit Margin-5.37%
Debt/Equity Ratio289.5%

How did BAND perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is BAND undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

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

  • Analyst Forecast

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.

BAND key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.2x
Enterprise Value/EBITDA40.6x
PEG Ration/a

Price to Sales Ratio vs Peers

How does BAND's PS Ratio compare to its peers?

BAND PS Ratio vs Peers
The above table shows the PS ratio for BAND vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average0.6x
SIFY Sify Technologies
0.9x25.2%US$312.5m
CRGE Charge Enterprises
0.6x11.8%US$362.8m
LILA Liberty Latin America
0.3x2.1%US$1.4b
SATS EchoStar
0.7x1.6%US$1.4b
BAND Bandwidth
0.6x12.6%US$301.1m

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.

BAND PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio0.6x
Fair PS Ratio1.4x

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.


Discover undervalued companies

Future Growth

How is Bandwidth forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


41.4%

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%).


Discover growth companies

Past Performance

How has Bandwidth performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-64.9%

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.


Discover strong past performing companies

Financial Health

How is Bandwidth's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • 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.


Balance Sheet


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.


Discover healthy companies

Dividend

What is Bandwidth current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Bandwidth Dividend Yield vs Market
How does Bandwidth dividend yield compare to the market?
SegmentDividend Yield
Company (Bandwidth)n/a
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.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.0yrs

Average management tenure


CEO

David Morken (53 yo)

21.75yrs

Tenure

US$3,384,684

Compensation

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
How has David Morken's remuneration changed compared to Bandwidth's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

-US$28m

Mar 31 2022n/an/a

-US$29m

Dec 31 2021US$3mUS$471k

-US$27m

Sep 30 2021n/an/a

-US$39m

Jun 30 2021n/an/a

-US$35m

Mar 31 2021n/an/a

-US$48m

Dec 31 2020US$4mUS$450k

-US$44m

Sep 30 2020n/an/a

-US$26m

Jun 30 2020n/an/a

-US$25m

Mar 31 2020n/an/a

-US$556k

Dec 31 2019US$2mUS$375k

US$2m

Sep 30 2019n/an/a

US$3m

Jun 30 2019n/an/a

US$7m

Mar 31 2019n/an/a

US$14m

Dec 31 2018US$1mUS$375k

US$18m

Sep 30 2018n/an/a

US$19m

Jun 30 2018n/an/a

US$18m

Mar 31 2018n/an/a

US$9m

Dec 31 2017US$2mUS$375k

US$5m

Sep 30 2017n/an/a

US$18m

Jun 30 2017n/an/a

US$20m

Mar 31 2017n/an/a

US$22m

Dec 31 2016US$931kUS$375k

US$22m

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.


Leadership Team

Experienced Management: BAND's management team is considered experienced (2 years average tenure).


Board Members

Experienced Board: BAND's board of directors are considered experienced (5.9 years average tenure).


Ownership

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

NasdaqGS:BAND Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
13 Sep 22SellUS$50,505Lukas RoushIndividual3,182US$15.87
08 Aug 22BuyUS$162,500Lukas RoushIndividual10,000US$16.25
13 Jun 22BuyUS$158,800Anthony BartoloIndividual10,000US$15.88
17 May 22BuyUS$188,800Anthony BartoloIndividual10,000US$18.88
08 Mar 22BuyUS$274,292Brian BaileyIndividual10,000US$27.43
28 Feb 22BuyUS$299,931Daryl RaifordIndividual9,760US$30.75
28 Feb 22BuyUS$92,336Richard AsbillIndividual3,000US$30.78
22 Nov 21SellUS$39,560Lukas RoushIndividual584US$67.74

Ownership Breakdown

What is the ownership structure of BAND?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders1,620,2786.4%
General Public1,640,2586.5%
Private Companies2,593,74010.3%
Institutions19,449,64076.9%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 73.05% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
9.39%
BlackRock, Inc.
2,376,790$28.3m-7.87%no data
8.25%
The Vanguard Group, Inc.
2,087,482$24.8m3.68%no data
7.18%
Capital Research and Management Company
1,816,185$21.6m-21.88%no data
5.93%
Telnyx LLC
1,500,000$17.9m0%no data
4.63%
Henry Kaestner
1,171,035$13.9m0%no data
4.32%
Hazel-Rah III Llc
1,093,740$13.0m0%no data
3.09%
Portolan Capital Management, LLC
780,869$9.3m-23.41%0.92%
3.06%
BNY Mellon Asset Management
773,750$9.2m-4.43%no data
2.51%
Jacobs Levy Equity Management Inc
636,040$7.6m0%0.06%
2.48%
State Street Global Advisors, Inc.
627,441$7.5m17.4%no data
2.08%
Marshall Wace LLP
527,309$6.3m-30.18%0.02%
2.06%
Citadel Advisors LLC
520,060$6.2m15.13%0.01%
1.98%
Assenagon Asset Management S.A.
501,714$6.0m124.66%0.02%
1.82%
Morgan Stanley, Investment Banking and Brokerage Investments
461,581$5.5m-5.43%no data
1.75%
Handelsbanken Asset Management
442,900$5.3m-19.97%0.01%
1.65%
Geode Capital Management, LLC
418,265$5.0m11.3%no data
1.64%
Macquarie Investment Management Business Trust
414,776$4.9m5.62%0.01%
1.51%
Two Sigma Investments, LP
383,317$4.6m-7.16%0.02%
1.43%
D. E. Shaw & Co., L.P.
362,959$4.3m25.91%0.01%
1.29%
Teachers Insurance and Annuity Association-College Retirement Equities Fund
325,508$3.9m207.66%no data
1.17%
Voloridge Investment Management, LLC
296,729$3.5m3.87%0.02%
1.11%
Two Sigma Advisers, LP
280,500$3.3m40.88%0.01%
0.96%
Renaissance Technologies LLC
242,700$2.9m-48.16%no data
0.88%
Northern Trust Global Investments
223,929$2.7m-5.97%no data
0.86%
Norges Bank Investment Management
218,137$2.6m0%no data

Company Information

Bandwidth Inc.'s employee growth, exchange listings and data sources


Key Information

  • 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


Location

  • Bandwidth Inc.
  • 900 Main Campus Drive
  • Suite 500
  • Raleigh
  • North Carolina
  • 27606
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BANDNasdaqGS (Nasdaq Global Select)YesClass A Common StockUSUSDNov 2017
5XBDB (Deutsche Boerse AG)YesClass A Common StockDEEURNov 2017

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/02 00:00
End of Day Share Price2022/09/30 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


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.