BAND - Bandwidth: Strong FCF Generation And Promising Growth Prospects Ahead

2024-05-10 05:32:21 ET

Summary

• BAND is a dominant player in the CPaaS market and has seen deserved share price appreciation due to strong execution.
• The headwinds facing the business are behind it, with revenue showing strong growth in Q1.
• The business is expected to generate more than $50 million in free cash flow this year, which will reduce its leverage and strengthen its balance sheet.

Investment thesis

Bandwidth's ( BAND ) business has faced a couple of turbulent years, following the boom during the pandemic. Besides lower usage of the platform after the pandemic, the business subsequently suffered from a DDoS attack in October 2021 which led to some of its customers reducing the use of its platform. This led to its share price dropping even below its IPO price in 2017 of $20, even though its revenue had grown three times larger....

For further details see: