Braze (NASDAQ:BRZE – Get Free Report) and Bandwidth (NASDAQ:BAND – Get Free Report) are both business services companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.
Institutional and Insider Ownership
90.5% of Braze shares are held by institutional investors. Comparatively, 68.5% of Bandwidth shares are held by institutional investors. 24.0% of Braze shares are held by insiders. Comparatively, 6.2% of Bandwidth shares are held by 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.
Earnings and Valuation
This table compares Braze and Bandwidth’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Braze | $505.48 million | 7.47 | -$129.17 million | ($1.28) | -29.02 |
| Bandwidth | $601.12 million | 0.65 | -$16.34 million | ($1.12) | -13.01 |
Volatility and Risk
Braze has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, Bandwidth has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and target prices for Braze and Bandwidth, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Braze | 0 | 0 | 17 | 0 | 3.00 |
| Bandwidth | 1 | 3 | 5 | 0 | 2.44 |
Braze presently has a consensus price target of $61.13, suggesting a potential upside of 63.44%. Bandwidth has a consensus price target of $25.71, suggesting a potential upside of 73.28%. Given Bandwidth’s higher probable upside, analysts plainly believe Bandwidth is more favorable than Braze.
Profitability
This table compares Braze and Bandwidth’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Braze | -25.06% | -27.85% | -15.66% |
| Bandwidth | -3.21% | -1.92% | -0.52% |
Summary
Bandwidth beats Braze on 9 of the 14 factors compared between the two stocks.
About Braze
Braze, Inc. operates a customer engagement platform that provides interactions between consumers and brands worldwide. The company offers Braze software development kits that automatically manage data ingestion and deliver mobile and web notifications, in-application/in-browser interstitial messages, and content cards; REST API that can be used to import or export data or to trigger workflows between Braze and brands' existing technology stacks; Partner Data Integrations, which allow brands to sync user cohorts from partners; Data Transformation, in which brands can programmatically sync and transform user data; and Braze Cloud Data Ingestion that enables brands to harness their customer data. It also offers classification products, including segmentation that can define reusable segments of consumers based upon attributes, events, or predictive propensity scores; segment insights, which allows customers to analyze how segments are performing relative to each other across a set of pre-selected key performance indicators; and predictive suite that allows customers to identify groups of consumers that are of critical business value. In addition, the company provides Canvas, an orchestration tool that allows customers to create journeys, mapping out multi-steps, and cross-channel messaging experiences; campaigns, which allows customers to send one set of single-channel or multi-channel messages to be delivered to customers in a particular user segment; event and API triggering; marketing pressure management; and reporting and analytics. Further, it offers personalization products, such as liquid templating platform, connected content platform, content blocks, intelligent timing and channel, personalized variant, and AI item recommendations, and catalogs; and action products. The company was formerly known as Appboy, Inc. and changed its name to Braze, Inc. in November 2017. Braze, Inc. was incorporated in 2011 and is headquartered in New York, New York.
About Bandwidth
Bandwidth is a leading enterprise cloud communications company. Companies like Cisco, Google, Microsoft, RingCentral, Uber, and Zoom use Bandwidth’s APIs to easily embed voice, messaging, and emergency services into software and applications. Bandwidth is the first and only CPaaS provider offering a robust selection of communications APIs built around their own IP voice network.
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