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Bandwidth Inc. (BAND) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Bandwidth (BAND - Free Report) ? Shares have been on the move with the stock up 33.2% over the past month. The stock hit a new 52-week high of $18.89 in the previous session. Bandwidth has gained 27.4% since the start of the year compared to the 8.3% move for the Zacks Computer and Technology sector and the -20% return for the Zacks Communication - Infrastructure industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 28, 2024, Bandwidth reported EPS of $0.38 versus consensus estimate of $0.24 while it beat the consensus revenue estimate by 7.32%.
Valuation Metrics
Bandwidth may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Bandwidth has a Value Score of A. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 13.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 5.1X. On a trailing cash flow basis, the stock currently trades at 10.5X versus its peer group's average of 5.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Bandwidth currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Bandwidth meets the list of requirements. Thus, it seems as though Bandwidth shares could have a bit more room to run in the near term.
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Bandwidth Inc. (BAND) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Bandwidth (BAND - Free Report) ? Shares have been on the move with the stock up 33.2% over the past month. The stock hit a new 52-week high of $18.89 in the previous session. Bandwidth has gained 27.4% since the start of the year compared to the 8.3% move for the Zacks Computer and Technology sector and the -20% return for the Zacks Communication - Infrastructure industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 28, 2024, Bandwidth reported EPS of $0.38 versus consensus estimate of $0.24 while it beat the consensus revenue estimate by 7.32%.
Valuation Metrics
Bandwidth may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Bandwidth has a Value Score of A. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 13.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 5.1X. On a trailing cash flow basis, the stock currently trades at 10.5X versus its peer group's average of 5.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Bandwidth currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Bandwidth meets the list of requirements. Thus, it seems as though Bandwidth shares could have a bit more room to run in the near term.