Bandwidth (BAND) appears to have found support after losing some value lately, as indicated by the formation of a hammer chart. In addition to this technical chart pattern, strong agreement among Wall Street analysts in revising earnings estimates higher enhances the stock's potential for a turnaround in the near term.
Despite a 10% stock drop post-Q4 results, Bandwidth reported a healthy revenue beat and strong net revenue retention rates, making it a compelling value play. We note that Bandwidth's revenue growth is now far outstripping its better-recognized rival, Twilio, both of which benefited from political cycle revenue in FY '24. Bandwidth's robust FY '25 guidance signals ~10% organic revenue growth, alongside margin expansion toward a path of hitting ~20% adjusted EBITDA margins by FY '26.
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BAND's fourth-quarter 2024 earnings miss estimates on solid revenue growth.
Cloud communications specialist Bandwidth (BAND -6.57%) reported mixed fourth-quarter financial results on Thursday, Feb. 20. A key highlight was generating record revenue of $210 million, up 27% year over year and exceeding analyst consensus estimates of $203 million.
Bandwidth Inc. (NASDAQ:BAND ) Q4 2024 Earnings Conference Call February 20, 2025 8:00 AM ET Company Participants Sarah Walas - Vice President, Investor Relations David Morken - Cofounder, Chief Executive Officer and Chairman Daryl Raiford - Chief Financial Officer Conference Call Participants Arjun Bhatia - William Blair Ryan MacWilliams - Barclays Patrick Walravens - Citizens JMP Meta Marshall - Morgan Stanley Ryan Koontz - Needham Will Power - Baird Operator Good day and welcome to the Bandwidth Fourth Quarter and Full Year 2024 Earnings Conference Call. All participants will be in a listen-only mode.
Bandwidth (BAND) came out with quarterly earnings of $0.37 per share, missing the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.38 per share a year ago.
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The consensus price target hints at a 31.5% upside potential for Bandwidth (BAND). While empirical research shows that this sought-after metric is hardly effective, an upward trend in earnings estimate revisions could mean that the stock will witness an upside in the near term.
Shares have remained weak in recent months, despite strong growth and improving profitability in the underlying business. The market appears to be pricing in a significant growth deceleration due to the lack of political spending on the platform in 2025. Despite this headwind, I expect 8% year over year increase in Adjusted EBITDA and a 10% increase in FCF for FY25.
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Bandwidth has shown a notable turnaround in Q3 with a 28% y/y revenue growth, driven partly by election-cycle messaging, and raised its FY24 outlook. Despite recent gains, Bandwidth remains a value stock with a 1.0x FY25 revenue multiple and a 6.5x EV/FY25 adjusted EBITDA multiple. The company's net revenue retention rate rebounded to 117% in Q3, indicating strong customer usage and upsell, with further upside potential.