US$24.50: That's What Analysts Think Bandwidth Inc. (NASDAQ:BAND) Is Worth After Its Latest Results

Shareholders in Bandwidth Inc. (NASDAQ:BAND) had a terrible week, as shares crashed 32% to US$15.21 in the week since its latest second-quarter results. Revenues were in line with expectations, at US$174m, while statutory losses ballooned to US$0.17 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Bandwidth

Taking into account the latest results, the current consensus from Bandwidth's seven analysts is for revenues of US$716.1m in 2024. This would reflect a meaningful 8.2% increase on its revenue over the past 12 months. Per-share losses are expected to explode, reaching US$1.02 per share. Before this earnings announcement, the analysts had been modelling revenues of US$716.0m and losses of US$0.79 per share in 2024. While this year's revenue estimates held steady, there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target fell 5.8% to US$24.50per share, with the analysts clearly concerned by ballooning losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Bandwidth analyst has a price target of US$36.00 per share, while the most pessimistic values it at US$16.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Bandwidth's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.8% per year. Even after the forecast slowdown in growth, it seems obvious that Bandwidth is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Bandwidth. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Bandwidth going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 4 warning signs for Bandwidth that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com