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Winners And Losers Of Q3: Bandwidth (NASDAQ:BAND) Vs The Rest Of The Software Development Stocks


Jabin Bastian /
2022/01/18 5:46 am EST
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The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Bandwidth (NASDAQ:BAND) and the rest of the software development stocks fared in Q3.

Software is eating the world, as Marc Andreessen says, and there is virtually no industry left that has been untouched by it. That in turn drives increasing demand for tools that help software developers do their jobs, whether it is monitoring critical cloud infrastructure, integrating audio and video functionality or ensuring smooth streaming of content.

The 13 software development stocks we track reported a strong Q3; on average, revenues beat analyst consensus estimates by 5.41%, while on average next quarter revenue guidance was 3.29% above consensus. Technology stocks have been hit hard on fears of higher interest rates and while some of the software development stocks have fared somewhat better, they have not been spared, with share price declining 18.2% since earnings, on average.

Bandwidth (NASDAQ:BAND)

Started in 1999 by David Morken who was later joined by Henry Kaestner as co-founder in 2001, Bandwidth (NASDAQ:BAND) provides thousands of customers with a software platform that uses its own global network to provide phone numbers, voice, and text connectivity.

Bandwidth reported revenues of $130.6 million, up 54.1% year on year, beating analyst expectations by 3.61%. It was a weaker quarter for the company, with an exceptional revenue growth but an underwhelming revenue guidance for the next quarter.

"Bandwidth continues to play a critical role in the enterprise move to the cloud," stated David Morken, Chief Executive Officer of Bandwidth.

Bandwidth Total Revenue

Bandwidth delivered the weakest full year guidance update of the whole group. The company added 122 customers to a total of 3,173. The stock is down 17% since the results and currently trades at $68.81.

Read our full report on Bandwidth here, it's free.

Best Q3: GitLab (NASDAQ:GTLB)

Founded as an open-source project in 2011, GitLab (NASDAQ:GTLB) is a leading software development tools platform.

GitLab reported revenues of $66.8 million, up 51.3% year on year, beating analyst expectations by 12.8%. It was a great quarter for the recently public company, with an impressive beat of analyst estimates and a very optimistic guidance for the next quarter.

GitLab Total Revenue

The stock is down 28.4% since the results and currently trades at $64.

Is now the time to buy GitLab?

Slowest Q3: Akamai (NASDAQ:AKAM)

Founded in 1999 by two engineers from MIT, Akamai (NASDAQ:AKAM) provides software for organizations to efficiently deliver web content to their customers.

Akamai reported revenues of $860.3 million, up 8.51% year on year, in line with analyst expectations.

Akamai had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is up 6.12% since the results and currently trades at $111.57.

Read our full analysis of Akamai's results here.

F5 Networks (NASDAQ:FFIV)

While the company initially started in the late 90s by selling hardware appliances, these days F5 (NASDAQ:FFIV) is making software that helps large enterprises ensure their web applications are always available, by distributing network traffic and protecting them from cyber attacks.

F5 Networks reported revenues of $681.9 million, up 10.9% year on year, beating analyst expectations by 1.55%. The stock is up 17.1% since the results and currently trades at $239.

Read our full, actionable report on F5 Networks here, it's free.

Sumo Logic (NASDAQ:SUMO)

Founded in 2010 by Christian Beegden who went from driving a cab in Germany to landing an internship at Amazon, Sumo Logic (NASDAQ:SUMO) is software as a service data analytics platform that helps companies get insight into what is happening in their servers and applications.

Sumo Logic reported revenues of $62 million, up 19.5% year on year, beating analyst expectations by 1.9%. It was an OK quarter for the company, with guidance roughly in line with what analysts were expecting.

The stock is down 12.9% since the results and currently trades at $11.87.

Read our full, actionable report on Sumo Logic here, it's free.

The author has no position in any of the stocks mentioned