EU and US could reach trade deal this weekend - Reuters
On Friday, Citizens JMP analysts maintained their Market Outperform rating on Bandwidth Inc. (NASDAQ:BAND) with a steady price target of $36.00. The company’s fourth-quarter 2024 performance yielded a mixed outcome, with non-GAAP earnings per share (EPS) at $0.37, slightly below the anticipated $0.39. According to InvestingPro analysis, the stock appears undervalued at current levels, with analysts setting targets ranging from $18 to $36. Bandwidth surpassed expectations with an adjusted EBITDA of $23 million, against the consensus of $20 million.
The revenue figures reported by Bandwidth were $210 million, exceeding the $204 million forecast and marking a 27% year-over-year increase. This growth represents a minor slowdown from the previous quarter’s 28% expansion. The company maintains strong financial health metrics, with a current ratio of 1.34 indicating sufficient liquidity to meet short-term obligations. The Cloud Communications segment contributed $144 million to the revenue, aligning with projections and showing a 15% increase from the previous year.
Bandwidth also reported a robust free cash flow of $30 million, which was higher than the $25 million consensus. The company’s strong free cash flow yield of 15% suggests significant value generation potential. Despite these positive financial indicators, Bandwidth’s stock experienced a downturn, closing approximately 4% lower. This decline followed a year-to-date rise of 3%, which contrasted with a 4% uptick in the Russell 3000 index. InvestingPro subscribers can access 7 additional key insights about Bandwidth’s financial health and growth prospects in the comprehensive Pro Research Report.
The company’s financial health was highlighted by the strong adjusted EBITDA and free cash flow, which indicated a solid performance despite the earnings per share falling short of expectations. The slight deceleration in year-over-year revenue growth did not significantly impact the analysts’ outlook, as they reaffirmed their positive rating and price target on the stock. With revenue growth of 24.5% over the last twelve months and net income expected to grow this year, Bandwidth shows promising fundamentals despite current market challenges.
In other recent news, Bandwidth Inc. reported its fourth-quarter earnings, showing adjusted earnings per share of $0.37, which narrowly missed analyst estimates by $0.01. The company, however, surpassed revenue expectations for the quarter, posting $210 million against a forecast of $189.32 million, marking a 27% year-over-year growth. Despite these results, Bandwidth’s guidance for the upcoming first quarter disappointed investors, with expected revenue between $168-170 million, falling short of the anticipated $182.7 million. Additionally, for the full year 2025, the company projects revenue of $740-760 million, which is below the consensus estimate of $761.5 million. The company achieved a record non-GAAP gross margin of 58% in Q4, an increase from 55% the previous year, and adjusted EBITDA rose to $23.4 million from $18.8 million year-over-year. CEO David Morken highlighted the transformative year for Bandwidth, emphasizing their advancements in Voice AI and enterprise-grade solutions. Despite the strong Q4 results, the focus on soft guidance led to a decline in Bandwidth shares. CFO Daryl Raiford mentioned an expected "normalized revenue growth" of 8-11% in 2025, taking into account a potential reduction in political campaign messaging activity.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.