Can You Imagine How Jubilant Bandwidth's (NASDAQ:BAND) Shareholders Feel About Its 198% Share Price Gain?
Unfortunately, investing is risky - companies can and do go bankrupt. But when you pick a company that is really flourishing, you can make more than 100%. Take, for example Bandwidth Inc. (NASDAQ:BAND). Its share price is already up an impressive 198% in the last twelve months. It's also good to see the share price up 16% over the last quarter. Bandwidth hasn't been listed for long, so it's still not clear if it is a long term winner.
Check out our latest analysis for Bandwidth
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the last year Bandwidth saw its earnings per share (EPS) drop below zero. While some may see this as temporary, we're a skeptical bunch, and so we're a little surprised to see the share price go up. It may be that the company has done well on other metrics.
However the year on year revenue growth of 26% would help. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free report showing analyst forecasts should help you form a view on Bandwidth
A Different Perspective
Bandwidth shareholders should be happy with the total gain of 198% over the last twelve months. The more recent returns haven't been as impressive as the longer term returns, coming in at just 16%. Having said that, we doubt shareholders would be concerned. It seems the market is simply waiting on more information, because if the business delivers so will the share price (eventually). It's always interesting to track share price performance over the longer term. But to understand Bandwidth better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Bandwidth (of which 1 can't be ignored!) you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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