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Investing.com - Bandwidth Inc. (NASDAQ:BAND) shares fell approximately 19% despite the company reporting better-than-expected second-quarter 2025 results. According to InvestingPro data, the stock has shown significant volatility, with a beta of 1.84 and a steep 41% decline over the past year.
JMP analyst Patrick Walravens reiterated a Market Outperform rating on Bandwidth with a price target of $36.00 following the earnings release. The company reported non-GAAP earnings per share of $0.38, exceeding the consensus estimate of $0.33. InvestingPro analysis shows the company maintains healthy liquidity with a current ratio of 1.31, indicating strong ability to meet short-term obligations.
Bandwidth posted adjusted EBITDA of $22 million, surpassing the consensus of $19 million, on revenue of $180 million, slightly above the expected $179 million. Revenue grew 4% year-over-year, an improvement from 2% growth in the previous quarter.
Cloud Communications revenue reached $136 million, ahead of the $134 million consensus, representing 8% growth on a normalized basis compared to 6% in the previous quarter. Enterprise Voice revenue was particularly strong at $13 million, increasing 29% year-over-year.
The company achieved gross margins of 58.4%, exceeding estimates of 57.9%, and generated free cash flow of $26 million versus the expected $22 million. Despite these positive results, Bandwidth stock has now decreased 22% year-to-date, compared to an 8% increase for the Russell 3000. InvestingPro analysis suggests the stock is currently undervalued, with 8 additional exclusive insights available to subscribers through the comprehensive Pro Research Report.
In other recent news, Bandwidth Inc. reported its second-quarter 2025 earnings, surpassing expectations with an earnings per share (EPS) of $0.38, compared to the forecasted $0.32. This represents an 18.75% surprise for investors. Additionally, the company’s revenue reached $180 million, slightly above the anticipated $178.87 million. These results reflect positive financial performance for the quarter. Despite the earnings beat, Bandwidth’s stock experienced a premarket dip. The stock traded at $15.95, a decrease from its previous closing price of $16.21. These developments highlight the company’s ability to exceed earnings and revenue expectations.
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