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Bandwidth (BAND) Gains But Lags Market: What You Should Know
Bandwidth (BAND - Free Report) closed at $25.08 in the latest trading session, marking a +0.8% move from the prior day. The stock lagged the S&P 500's daily gain of 1.05%. At the same time, the Dow added 0.02%, and the tech-heavy Nasdaq gained 9.7%.
Prior to today's trading, shares of the enterprise software developer had gained 11.97% over the past month. This has outpaced the Computer and Technology sector's gain of 11.44% and the S&P 500's gain of 6.27% in that time.
Wall Street will be looking for positivity from Bandwidth as it approaches its next earnings report date. On that day, Bandwidth is projected to report earnings of $0.04 per share, which would represent a year-over-year decline of 55.56%. Meanwhile, our latest consensus estimate is calling for revenue of $146.64 million, up 16.26% from the prior-year quarter.
It is also important to note the recent changes to analyst estimates for Bandwidth. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 10.35% higher within the past month. Bandwidth currently has a Zacks Rank of #2 (Buy).
In terms of valuation, Bandwidth is currently trading at a Forward P/E ratio of 39.24. Its industry sports an average Forward P/E of 12.47, so we one might conclude that Bandwidth is trading at a premium comparatively.
Investors should also note that BAND has a PEG ratio of 1.57 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Communication - Infrastructure industry currently had an average PEG ratio of 0.87 as of yesterday's close.
The Communication - Infrastructure industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 197, which puts it in the bottom 22% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.