Benzinga | Feb 24, 2021 10:10AM EST

Earnings Preview: Bandwidth

On Thursday, February 25, Bandwidth (NASDAQ:BAND) will release its latest earnings report. Benzinga's report can help you figure out the ins and outs of the earnings release.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Wall Street expects EPS of $0.04 and sales around $96.72 million. Bandwidth EPS in the same period a year ago totaled $0.02. Revenue was $62.00 million.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The Wall Street estimate would represent a 300.0% increase in the company's earnings. Sales would be up 55.99% on a year-over-year basis. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate -0.02 0 -0.11 -0.14EPS Actual 0.24 0.13 0.04 -0.02Revenue Estimate 75.80 M 70.51 M 63.29 M 60.01 MRevenue Actual 84.76 M 76.79 M 68.52 M 62.00 M

Stock Performance

Shares of Bandwidth were trading at $171.13 as of February 23. Over the last 52-week period, shares are up 162.43%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Bandwidth is scheduled to hold the call at 17:00:00 ET and can be accessed here.