Bandwidth (NASDAQ:BAND) Stock Jumps 6.6% - Should You Buy?

Key Points

• Bandwidth shares rose 6.6% to about $43.18, although trading volume was 64% below the average daily level.
• Analyst sentiment is mixed but improving: four analysts rate the stock a Buy and five rate it a Hold, with a consensus price target of $59.29.
• The company recently exceeded quarterly earnings and revenue expectations, with revenue up 22.2% year over year; however, executives have sold shares recently, including the CEO and CFO.

Shares of Bandwidth Inc. (NASDAQ:BAND - Get Free Report) traded up 6.6% during mid-day trading on Friday. The stock traded as high as $43.21 and last traded at $43.1750. Approximately 314,597 shares were traded during trading, a decline of 64% from the average daily volume of 872,433 shares. The stock had previously closed at $40.50.

Analysts Set New Price Targets

A number of research analysts recently weighed in on BAND shares. Weiss Ratings upgraded shares of Bandwidth from a "sell (d+)" rating to a "hold (c)" rating in a research note on Friday, October 9th. Wall Street Zen raised Bandwidth from a "hold" rating to a "buy" rating in a report on Saturday, October 17th. Needham & Company LLC reiterated a "buy" rating on shares of Bandwidth in a research report on Thursday, August 20th. Piper Sandler boosted their price objective on Bandwidth from $38.00 to $52.00 and gave the company a "neutral" rating in a research note on Wednesday, August 19th. Finally, Citizens Jmp increased their price objective on Bandwidth from $70.00 to $86.00 and gave the stock a "market outperform" rating in a report on Monday, July 20th. Four equities research analysts have rated the stock with a Buy rating and five have given a Hold rating to the company's stock. Based on data from MarketBeat, the company has an average rating of "Hold" and a consensus target price of $59.29.

Bandwidth Price Performance

The business has a 50-day simple moving average of $51.84 and a 200 day simple moving average of $51.04. The firm has a market cap of $1.39 billion, a P/E ratio of -148.58, a price-to-earnings-growth ratio of 4.17 and a beta of 3.01. The company has a debt-to-equity ratio of 0.87, a quick ratio of 2.04 and a current ratio of 2.04.

Bandwidth (NASDAQ:BAND - Get Free Report) last issued its quarterly earnings data on Wednesday, July 29th. The company reported $0.37 earnings per share for the quarter, topping analysts' consensus estimates of $0.36 by $0.01. Bandwidth had a return on equity of 1.85% and a net margin of 0.27%. The firm had revenue of $219.90 million for the quarter, compared to analyst estimates of $217.62 million. Bandwidth's quarterly revenue was up 22.2% on a year-over-year basis. Bandwidth has set its Q3 2026 guidance at 0.450-0.490 EPS and its FY 2026 guidance at 1.710-1.790 EPS. On average, analysts anticipate that Bandwidth Inc. will post 0.64 earnings per share for the current fiscal year.

Insider Activity

In related news, CFO Daryl Raiford sold 4,673 shares of the stock in a transaction dated Monday, August 31st. The shares were sold at an average price of $49.15, for a total value of $229,677.95. Following the completion of the transaction, the chief financial officer directly owned 35,832 shares of the company's stock, valued at $1,761,142.80. This represents a 11.54% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, CEO David Morken sold 5,128 shares of the stock in a transaction dated Monday, August 31st. The stock was sold at an average price of $49.15, for a total transaction of $252,041.20. Following the completion of the transaction, the chief executive officer directly owned 6,702 shares of the company's stock, valued at approximately $329,403.30. The trade was a 43.35% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders have sold 25,050 shares of company stock worth $1,228,342. 5.26% of the stock is owned by company insiders.

Institutional Investors Weigh In On Bandwidth

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Simplicity Wealth LLC bought a new stake in Bandwidth during the third quarter worth about $202,000. Sterling Capital Management LLC grew its holdings in Bandwidth by 850.0% in the third quarter. Sterling Capital Management LLC now owns 988 shares of the company's stock worth $60,000 after purchasing an additional 884 shares during the period. State of Alaska Department of Revenue grew its holdings in Bandwidth by 43.1% in the third quarter. State of Alaska Department of Revenue now owns 1,262 shares of the company's stock worth $76,000 after purchasing an additional 380 shares during the period. Tidal Investments LLC bought a new position in shares of Bandwidth during the second quarter valued at approximately $1,451,000. Finally, Engineers Gate Manager LP bought a new position in shares of Bandwidth during the second quarter valued at approximately $2,218,000. 68.53% of the stock is owned by hedge funds and other institutional investors.

Bandwidth Company Profile

Bandwidth Inc NASDAQ: BAND is a cloud communications company that provides application programming interfaces (APIs) and related network services for integrating voice, messaging and emergency communications into software applications. Its platform is designed for businesses, communications providers and technology companies that need to build communications capabilities into customer-facing products and internal workflows.

The company's offerings include programmable voice, text messaging and toll-free messaging services, as well as emergency calling capabilities through its E911 solution.

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