Bandwidth Inc.

BAND Details

Bandwidth Inc. (NASDAQ: BAND) is a global enterprise cloud communications company. It offers communications platform-as-a-service (CPaaS) that enables enterprises to create, scale and operate voice or text communications services across any mobile application, connected device, or enterprise.  Companies like Cisco, Google, Microsoft, RingCentral, Uber, and Zoom use BAND's APIs to embed voice, quick messages, and emergency services into software and applications. In Q2FY21, U.S. accounted for 88.60% of BAND's total revenue.

Introducing BYOC Solutions for Large Enterprises: On July 27, 2021, BAND announced the launch of Duet, a "Bring Your Own Carrier" (BYOC) solution for RingCentral, Inc., a provider of global enterprise cloud communications, video meetings, collaboration, and contact center solutions. BYOC solution will aid large enterprises in modernizing their cloud communications and enable RingCentral's Message Video Phone (MVP) platform to provide additional flexibility and control to enterprises transforming legacy communications.     

Management Changes: On July 08, 2021, BAND announced the appointment of Daryl Raiford as its CFO, effective from August. Before joining BAND, Mr. Raiford held the position of CFO at Ribbon Communications, a provider of communications software and network solutions.

Q2FY21 Results: The company reported YoY growth of 57.13% in total revenues to USD 120.66 million in Q2FY21 (ended June 30, 2021) compared to USD 76.79 million in Q2FY20, attributable to the acquisition of Voxbone S.A. in November 2020, and higher demand for all CPaaS services. CPaaS segment, which represented 87.06% of the total revenue in Q2FY21, improved by 56.60% YoY. In Q2FY21, BAND's active CPaaS customers increased 60.58% YoY to 3,051 vs. 1,900 in Q2FY20. Net loss for the company reduced to USD 6.93 million in Q2FY21 vs. USD 20.64 million in Q2FY20. As of June 30, 2021, the company had cash and cash equivalents of USD 309.62 million and total debt of USD 472.47 million.

Key Risks: BAND's top 10 enterprise customers accounted for the majority of its revenue in Q2FY21. The loss of any of these key customers could hurt the company's financials. In addition, BAND operates in the cloud communications industry and faces direct competition from more prominent players with higher financial and operational resources at their disposal. As a result, any advanced innovation or superior product development by its competitors could impact its operations.

Outlook: In Q3FY21, BAND expects its total revenue to range between USD 123.6 – 124.6 million, including CPaaS revenue to the tune of USD 106.1 – 107.1 million. It also expects its non-GAAP EPS to range between USD 0.07 – 0.09. For FY21, the company anticipates its revenue to be in the range of USD 484.8 – 486.8 million, including CPaaS revenue of USD 418.4 – 420.4 million. FY21, non-GAAP EPS is estimated to be around USD 0.71 – 0.75.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

 (Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

BAND Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: BAND's stock price decreased 40.58% in the past six months and is currently leaning towards the lower band of its 52-week range of USD 107.01 to USD 198.61. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 20.65. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 135.79. Considering the significant growth in topline, positive outlook, and associated risks, we recommend a "Buy" rating on the stock at the current price of USD 109.39, down 1.23% as of August 16, 2021, 12:21 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached. 

Aptorum Group Limited 

 

APM Details

Aptorum Group Limited (NASDAQ: APM) is a clinical-stage biopharmaceutical company engaged in the discovery, development, and commercialization of therapeutic assets to treat oncology and infectious diseases. In addition, APM is working on therapeutic and diagnostic projects in neurology, gastroenterology, metabolic disorders, women's health, and other diseases. Its operating segments are, 1) Therapeutics, which includes developing drug molecules and treating human diseases that require unmet medical needs, and 2) Non-Therapeutics, which includes molecular-based rapid pathogen identification and detection diagnostics (RPIDD) based technology projects, natural supplements (NativusWell), and AML Clinic. The company derives its healthcare services income from its AML Clinic in Central Hong Kong. As of August 16, 2021, APM's market capitalization stood at USD 86.90 million.

Progress in Phase 1 Clinical trial for ALS-4: On July 12, 2021, the company announced positive results for the ongoing improvement of its phase 1 clinical trial for ALS-4 (a first-in-class anti-virulence approach based small molecule targeting Staphylococcus aureus). Two additional cohorts (Cohort C & D) of the single ascending dose (SAD) portion of the phase 1 trial were successfully conducted in healthy male and female adult subjects without any adverse effects.

FY20 Results: The company reported YoY growth of 70.32% in healthcare services revenue to USD 911.51 thousand in FY20 (ended December 31, 2020) compared to USD 535.17 thousand in FY19. APM increased its research and development (R&D) expenses to USD 11.59 million in FY20 compared to USD 6.94 million in FY19. APM reported a net income of USD 6.31 million in FY20 vs. a net loss of USD 18.69 million in FY19, owing to a USD 25.24 million gain on investments in marketable securities. As of December 31, 2020, the company had cash & cash equivalents (including short-term investments) of USD 31.88 million and total debt of USD 2.25 million.

APM Product Pipeline (Source: Corporate Presentation, Q2FY21)

Key Risks: APM's prospects are dependent on the success of its three lead projects, ALS-4, SACT-1, and RPIDD. It has invested a significant number of resources in their development. If it fails to obtain regulatory approvals or cannot set up an efficient manufacturing and distribution mechanism, its results of operations could be adversely impacted.

APM Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: APM's stock price decreased 28.65% in the past six months and is currently leaning towards the lower band of its 52-week range of USD 1.16 to USD 14.23. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 35.27. Considering the significant decline in the stock price in the past six months, progress in the clinical trial of ALS-4, and associated risks, we recommend a "Speculative Buy" rating on the stock at the closing price of USD 2.44, down 3.94% as of August 16, 2021.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.