On Wednesday, Canaccord Genuity maintained its Buy rating on Bandwidth Inc. (NASDAQ:) and increased its stock price target to $40 from the previous $38. The revision follows Bandwidth’s impressive first quarter results for the year 2024, which exceeded both Canaccord’s and the consensus expectations.
The company reported a record quarterly revenue of $171 million, marking a 24% year-over-year increase and surpassing estimates by $6 million.
The firm’s profitability also outperformed forecasts, with adjusted EBITDA reaching $16 million, $4 million ahead of the midpoint of the first-quarter guidance. This figure represents the highest result for a first quarter in the company’s history.
The positive financial outcomes come after a period of slower growth in 2023, which was attributed to macroeconomic conditions and reduced demand for cyclical political messaging.
Canaccord Genuity predicts that Bandwidth will experience growth in 2024 driven by several factors. These include heightened political messaging demand, an uptick in international traffic, a burgeoning messaging business, improved gross margins, and the potential to expand with a new cohort of customers.
The firm’s optimistic outlook is based on Bandwidth’s role as a leader in Communications Platform as a Service (CPaaS) for large global enterprises.
The stock price target increase to $40 is based on approximately 2 times the enterprise value to sales (EV/S) of Canaccord’s 2025 estimates. Canaccord believes that Bandwidth’s stock is currently attractive given the company’s long-term business prospects. Furthermore, the firm anticipates that 2024 will present easier growth comparisons, and Bandwidth is well-positioned to deliver improved margins and cash flows.
remove ads
.
InvestingPro Insights
In light of Canaccord Genuity’s bullish stance on Bandwidth Inc. (NASDAQ:BAND), recent data from InvestingPro aligns with some of their optimism. The company’s revenue growth has been robust, with a remarkable 24.08% increase in the first quarter of 2024, contributing to a healthy 9.43% growth over the last twelve months.
This revenue surge is reflected in the company’s strong share price performance, with an exceptional 99.47% return over the past year and significant gains in shorter time frames, including a 20.21% increase in just the last week.
InvestingPro Tips suggest that while analysts are forecasting net income growth…
Click Here to Read the Full Original Article at All News…
