Comparing Bandwidth (NASDAQ:BAND) & ChannelAdvisor (NASDAQ:ECOM)

Bandwidth (NASDAQ:BAND) and ChannelAdvisor (NYSE:ECOM) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Insider and Institutional Ownership

84.7% of Bandwidth shares are held by institutional investors. Comparatively, 83.3% of ChannelAdvisor shares are held by institutional investors. 11.1% of Bandwidth shares are held by company insiders. Comparatively, 8.1% of ChannelAdvisor shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Bandwidth and ChannelAdvisor’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bandwidth $232.59 million 14.85 $2.49 million ($0.43) -336.70
ChannelAdvisor $129.96 million 4.45 $3.48 million $0.15 135.80

ChannelAdvisor has lower revenue, but higher earnings than Bandwidth. Bandwidth is trading at a lower price-to-earnings ratio than ChannelAdvisor, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Bandwidth has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, ChannelAdvisor has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Bandwidth and ChannelAdvisor, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bandwidth 0 1 6 0 2.86
ChannelAdvisor 0 1 3 0 2.75

Bandwidth presently has a consensus price target of $139.83, indicating a potential downside of 3.42%. ChannelAdvisor has a consensus price target of $17.00, indicating a potential downside of 16.54%. Given Bandwidth’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Bandwidth is more favorable than ChannelAdvisor.

Profitability

This table compares Bandwidth and ChannelAdvisor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bandwidth -9.21% -1.45% -0.95%
ChannelAdvisor 5.99% 9.14% 6.03%

Bandwidth Company Profile

Bandwidth Inc. operates as a cloud-based software-powered communications platform-as-a-service (CPaaS) provider in the United States. The company operates through two segments, CPaaS and Other. Its platform enables enterprises to create, scale, and operate voice or text communications services across mobile application or connected device. The company also provides SIP trunking, data resale, and hosted voice over Internet protocol services. It serves large enterprises, small and medium-sized businesses, technology companies, and other business. Bandwidth Inc. was founded in 2000 and is headquartered in Raleigh, North Carolina.

ChannelAdvisor Company Profile

ChannelAdvisor Corporation provides software-as-a-service solutions in the United States and internationally. Its e-commerce cloud platform helps brands and retailers to improve their online performance by expanding sales channels, connecting with consumers around the world, optimizing their operations for peak performance, and providing actionable analytics to improve competitiveness. Its suite of solutions include various modules, including Marketplaces module that connects customers to third-party marketplaces; and Digital Marketing module, which connects customers to compare shopping Websites that allow customers to advertise products on search engines. The company also offers Where to Buy solution that allows brands to provide their Web visitors or digital marketing audiences with information about the authorized resellers that carry their products and the availability of those products; and Product Intelligence, a solution that provides brands with insights about online assortment, product coverage gaps, pricing trends, and adherence by their retailers to content guidelines. Its customers include online businesses of online businesses of brands and retailers, as well as advertising agencies that use its solutions on behalf of their clients. The company was founded in 2001 and is headquartered in Morrisville, North Carolina.

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