Does Bandwidth Inc. (BAND) offer a good opportunity for investors?

Bandwidth Inc. (NASDAQ: BAND) stock jumped 8.74% on Friday to $19.66 against a previous-day closing price of $18.08. With 1.04 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.54 million shares. During the session, the Software – Infrastructure company that operates in wider Technology sector, reached to the highest price of $19.76 whereas the lowest price it dropped to was $18.33. The 52-week range on BAND shows that it touched its highest point at $130.00 and its lowest point at $15.00 during that stretch. It currently has a 1-year price target of $46.62. Beta for the stock currently stands at 0.86.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of BAND was up-trending over the past week, with a rise of 16.54%, but this was down by -5.48% over a month. Three-month performance dropped to -14.60% while six-month performance fell -68.32%. The stock lost -84.64% in the past year, while it has lost -72.60% so far this year. A look at the trailing 12-month EPS for BAND yields -1.15 with Next year EPS estimates of 0.57. For the next quarter, that number is -0.07. This implies an EPS growth rate of 40.30% for this year and 388.03% for next year. EPS is expected to grow by 20.60% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -21.30%.

Float and Shares Shorts:

At present, 25.22 million BAND shares are outstanding with a float of 21.10 million shares on hand for trading. On Jul 14, 2022, short shares totaled 2.58 million, which was 10.22% higher than short shares on Jun 14, 2022. In addition to Mr. David Andrew Morken as the firm’s Co-Founder, CEO, & Chairman, Mr. Daryl E. Raiford serves as its Exec. VP, CFO & Principal Accounting Officer.

Institutional Ownership:

Through their ownership of 91.05% of BAND’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 6.66% of BAND, in contrast to 47.92% held by mutual funds. Shares owned by individuals account for 42.69%. As the largest shareholder in BAND with 9.97% of the stake, Capital Research & Management Co holds 2,324,883 shares worth 2,324,883. A second-largest stockholder of BAND, The Vanguard Group, Inc., holds 1,954,269 shares, controlling over 8.38% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in BAND, holding 1,757,995 shares or 7.54% stake. With a 4.98% stake in BAND, the American Funds Small Cap World Fu is the largest stakeholder. A total of 1,160,982 shares are owned by the mutual fund manager. The ClearBridge Small Cap Growth Fund, which owns about 3.11% of BAND stock, is the second-largest Mutual Fund holder. It holds 724,743 shares valued at 13.64 million. Vanguard Total Stock Market Index holds 2.58% of the stake in BAND, owning 600,402 shares worth 11.3 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for BAND since 9 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 4 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With BAND analysts setting a high price target of $100.00 and a low target of $20.00, the average target price over the next 12 months is $42.43. Based on these targets, BAND could surge 408.65% to reach the target high and rise by 1.73% to reach the target low. Reaching the average price target will result in a growth of 115.82% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. BAND will report FY 2022 earnings on 02/22/2023. Analysts have provided yearly estimates in a range of $0.12 being high and $0.10 being low. For BAND, this leads to a yearly average estimate of $0.11. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Bandwidth Inc. reported -$0.04 EPS against a consensus estimate of -$0.04. The surprise factor in the prior quarter was $0.17. Based on analyst estimates, the high estimate for the next quarter is -$0.05 and the low estimate is -$0.09. The average estimate for the next quarter is thus -$0.07.

Summary of Insider Activity:

Insiders traded BAND stock several times over the past three months with 15 Buys and 10 Sells. In these transactions, 32,703 shares were bought while 3,513 shares were sold. The number of buy transactions has increased to 68 while that of sell transactions has risen to 57 over the past year. The total number of shares bought during that period was 117,167 while 25,047 shares were sold.

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