Rapid7 (NASDAQ:RPD) versus Bandwidth (NASDAQ:BAND) Critical Analysis

Rapid7 (NASDAQ:RPDGet Free Report) and Bandwidth (NASDAQ:BANDGet Free Report) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

95.7% of Rapid7 shares are owned by institutional investors. Comparatively, 68.5% of Bandwidth shares are owned by institutional investors. 2.6% of Rapid7 shares are owned by company insiders. Comparatively, 6.2% of Bandwidth shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Rapid7 and Bandwidth’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rapid7 -15.14% -31.09% 2.58%
Bandwidth -4.60% -2.49% -0.70%

Analyst Ratings

This is a summary of recent recommendations for Rapid7 and Bandwidth, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rapid7 0 10 6 0 2.38
Bandwidth 0 5 5 0 2.50

Rapid7 presently has a consensus price target of $51.73, suggesting a potential upside of 45.44%. Bandwidth has a consensus price target of $25.38, suggesting a potential upside of 21.64%. Given Rapid7’s higher probable upside, equities research analysts clearly believe Rapid7 is more favorable than Bandwidth.

Risk and Volatility

Rapid7 has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Bandwidth has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500.

Earnings & Valuation

This table compares Rapid7 and Bandwidth’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rapid7 $777.71 million 2.85 -$149.26 million ($2.05) -17.35
Bandwidth $601.12 million 0.94 -$16.34 million ($1.12) -18.62

Bandwidth has lower revenue, but higher earnings than Rapid7. Bandwidth is trading at a lower price-to-earnings ratio than Rapid7, indicating that it is currently the more affordable of the two stocks.

About Rapid7

(Get Free Report)

Rapid7, Inc. provides cybersecurity solutions under the Rapid7, Nexpose, and Metasploit brand names. The company offers endpoint to cloud data collection and sharing applications, such as Rapid7 Insight Agent, a software-based agent that is used on assets across on-premises and cloud environments to centralize and monitor data on company's platform; Rapid7 Insight Network Sensor that analyzes raw end-to-end network traffic to increase visibility into user activity, pinpoint real threats, and investigations; Rapid7 Cloud Event Data Harvesting that offers visibility into changes made to cloud resources; and third-party integrations and ecosystem, as well as orchestration and automation solutions. It also offers various platforms, including Rapid7 managed threat complete consisting of managed detection response that delivers end-to-end threat detection and response, as well as offloads day-to-day vulnerability management operations. In addition, it provides Rapid7 threat complete consisting of InsightIDR, a security information and event management, and extended detection and response solution; and InsightVM, a vulnerability management solution that provides visibility across on-premise and remote endpoints for security teams to evaluate the business risks, and configurations, and share with their IT counterparts for remediation. Further, the company offers Rapid7 cloud risk complete, which includes InsightCloudSec, a cloud risk and compliance management solution; and InsightAppSec, a dynamic application security testing tool. It also provides professional services. It serves a range of industries, including business services, pharmaceuticals, technology, energy, financial services, healthcare and life sciences, manufacturing, media and entertainment, retail, education, real estate, travel and transportation, government, online services, telecommunications, and professional services. The company was incorporated in 2000 and is headquartered in Boston, Massachusetts.

About Bandwidth

(Get Free Report)

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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