BAND
Bandwidth Inc.
$57.18
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 109.0% above fair value
You pay
$57.18
Bear
$0.00
Fair
$27.37
Bull
$61.84
Bear
$0.00
-100.0%
11% stage 1 growth, 12% discount
Fair
$27.37
-52.1%
19% stage 1 growth, 12% discount
Bull
$61.84
+8.1%
24% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
41%
Implied Market Multiple
86.5x
Market is pricing in (growth)
30.8%
vs 18.5% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $72.50 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $27.37 per share.
Warnings
Wall Street's average price target is $72.50 (from 16 analysts). Our estimate is 83% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions