What Happened:
Shares of communications platform as a service company Bandwidth (NASDAQ: BAND) jumped 10.6% in the afternoon session after the company reported first-quarter results that beat analysts' revenue and earnings per share estimates. Revenue guidance for the next quarter also came in above the Consensus, though adjusted EBITDA guidance missed. Full year guidance was maintained despite the beat. Two other dynamics to highlight are that revenue retention rate decreased year over year, and the company is still burning through cash. Overall, it was a solid quarter for the company but with some yellow flags. After the initial pop the shares cooled down to $11.67, down 0.56% from previous close.
What is the market telling us:
Bandwidth's shares are very volatile and over the last year have had 80 moves greater than 5%. But moves this big are very rare even for Bandwidth and that is indicating to us that this news had a significant impact on the market's perception of the business.
Bandwidth is down 47.7% since the beginning of the year, and at $11.67 per share it is trading 57.5% below its 52-week high of $27.50 from February 2023. Investors who bought $1,000 worth of Bandwidth's shares 5 years ago would now be looking at an investment worth $330.72.
Is now the time to buy Bandwidth? Access our full analysis of the earnings results here, it's free.