BAND - Bandwidth: 2024 Will Be The Year Of Strong Execution

2024-05-22 17:03:41 ET

Summary

• Bandwidth, a CPaaS vendor, is outperforming its larger rival Twilio with a stock increase of over 50% this year.
• The company is benefiting from cyclical growth due to election-cycle traffic and strong management execution that has substantially lifted adjusted EBITDA margins.
• Bandwidth has a meaningful market opportunity, revenue re-acceleration, high customer retention rate, and improved profitability.
• It trades at a cheap ~1x revenue multiple that has plenty of opportunity to rally.

Good businesses, even in the tech industry, come and go in cycles: it's not constantly an upward path. This can be a tough pill to swallow for investors who are used to perennial growth stocks that are able to constantly post double-digit growth rates (but have bloated valuation multiples to compensate for that). But great investments can be found in cyclical tech stocks as well, and this is the case for Bandwidth ( BAND ), a communications-platform-as-a-service (CPaaS) vendor that competes with its much larger rival Twilio ( TWLO )....

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