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In a challenging market environment, Bandwidth Inc. (NASDAQ:BAND) stock has touched a 52-week low, sinking to $11.68. Despite generating $748.5 million in revenue with 24.5% year-over-year growth, the communications software company has faced significant headwinds over the past year, reflected in a substantial 1-year change with a decline of -34.01%. According to InvestingPro analysis, the stock appears undervalued at its current market capitalization of $333 million. Investors have shown concern as the stock struggles to regain momentum, marking a stark contrast to its performance in previous periods. The current price level represents a critical juncture for Bandwidth, as market watchers and stakeholders closely monitor the company's efforts to pivot and strengthen its market position amidst the prevailing industry and economic pressures. InvestingPro analysis indicates the stock is in oversold territory, with 12 additional exclusive insights available to subscribers through the comprehensive Pro Research Report.
In other recent news, Bandwidth Inc. reported a mixed outcome for its fourth-quarter 2024 financial performance. The company posted non-GAAP earnings per share of $0.37, slightly below the anticipated $0.39, but exceeded expectations with an adjusted EBITDA of $23 million compared to the consensus of $20 million. Bandwidth's revenue figures reached $210 million, surpassing the $204 million forecast and marking a 27% year-over-year increase. However, the company's guidance for the first quarter revenue of 2025 fell short, with expectations between $168-170 million, below the analyst forecast of $182.7 million.
For the full year 2025, Bandwidth projected revenue of $740-760 million, which is also below the $761.5 million consensus estimate. Despite these concerns, the company reported a robust free cash flow of $30 million, exceeding the $25 million consensus, and a record non-GAAP gross margin of 58% for the fourth quarter, up from 55% a year ago. Analysts from Citizens JMP maintained their Market Outperform rating on Bandwidth with a price target of $36.00, highlighting the company's strong adjusted EBITDA and free cash flow. CFO Daryl Raiford indicated that Bandwidth is guiding for "normalized revenue growth" of 8-11% in 2025, adjusting for an expected cyclical reduction in political campaign messaging activity. Despite positive financial indicators, the company's shares experienced a decline following the announcement of the soft guidance.
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