It has been about a month since the last earnings report for Bandwidth (BAND Quick QuoteBAND - Free Report) . Shares have lost about 16.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Bandwidth due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Bandwidth Outpaces Q1 Earnings and Revenue Estimates

Bandwidth reported impressive first-quarter 2022 results, beating both the top-line and bottom-line estimates. The strong performance during the quarter was backed by enterprises increasing their reliability on Bandwidth platform for communications in the cloud. In order to drive growth, the company plans to focus on winning new large enterprises and turning out to be the best global CPaaS platform for scaling digital engagement.

Quarter Details

Revenues for the reported quarter were $131.4 million, compared to $113.5 million in the prior-year quarter. Revenues bet the Zacks Consensus Estimate of $126 million. The growth was backed by high demand for digital engagement, strong contributions from monthly recurring charges for phone numbers and emergency services.

On a GAAP basis, net loss during the quarter was $6.8 million or a loss of 27 cents per share, compared to a loss of $5.3 million or a loss of 21 cents per share in the prior-year quarter. Non-GAAP net income during the reported quarter was $2.5 million or 9 cents per share, compared with $8.3 million or 30 cents per share in the prior-year quarter. Non-GAAP earnings beat the Zacks Consensus Estimate of a loss of 9 cents per share.

Operating Details

Non-GAAP gross margin during the quarter was 53%, reflecting a growth of 1 percentage point, primarily due to efficient pricing and product mix and continued excellent execution within the cloud operations and service groups. Adjusted EBIDTA was $8.4 million compared with $13.4 million a year ago.

Cash Flow & Liquidity

For the first three months of 2022, net cash used in the operating activities was $6.7 million, compared to cash generated from operation activities of $10 million in the prior-year quarter. Cash and cash equivalents at the end of the quarter was $316 million with accrued expenses and other current liabilities of $65.5 million.

Guidance

The company has raised its outlook for 2022 due to the divestment of SIP line business. For 2022, the company expects revenues to be in the band of $551 million to $557 million, up from prior projections of $547-$555 million and non-GAAP earnings per share to be in the band of 10 cents to 14 cents, up from prior estimates of 3-9 cents per share.

For the second-quarter, revenues are expected to be in the band of $132.5 million and $134.5 million and non-GAAP loss are expected to be in the band of 9 cents and 5 cents per share.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -49.71% due to these changes.

VGM Scores

Currently, Bandwidth has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Bandwidth has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.