Financial Comparison: Lumen Technologies (NYSE:LUMN) versus Bandwidth (NASDAQ:BAND)

Lumen Technologies (NYSE:LUMN) and Bandwidth (NASDAQ:BAND) are both communication services companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lumen Technologies	-8.65%	N/A	-1.56%
Bandwidth	0.27%	1.85%	0.70%

Institutional & Insider Ownership

66.2% of Lumen Technologies shares are held by institutional investors. Comparatively, 68.5% of Bandwidth shares are held by institutional investors. 2.3% of Lumen Technologies shares are held by company insiders. Comparatively, 5.3% of Bandwidth shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Lumen Technologies and Bandwidth”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lumen Technologies	$11.83 billion	0.42	-$1.74 billion	($1.02)	-4.71
Bandwidth	$753.82 million	2.20	-$12.91 million	($0.29)	-177.65

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

Volatility and Risk

Lumen Technologies has a beta of 1.84, indicating that its stock price is 84% more volatile than the S&P 500. Comparatively, Bandwidth has a beta of 3.01, indicating that its stock price is 201% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Lumen Technologies and Bandwidth, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lumen Technologies	1	9	0	0	1.90
Bandwidth	1	4	4	0	2.33

Lumen Technologies presently has a consensus price target of $7.86, suggesting a potential upside of 63.52%. Bandwidth has a consensus price target of $59.29, suggesting a potential upside of 15.08%. Given Lumen Technologies’ higher probable upside, analysts plainly believe Lumen Technologies is more favorable than Bandwidth.

Summary

Bandwidth beats Lumen Technologies on 11 of the 14 factors compared between the two stocks.

About Lumen Technologies

Lumen Technologies, Inc., a facilities-based technology and communications company, provides various integrated products and services to business and residential customers in the United States and internationally. The company operates in two segments, Business and Mass Markets. It offers dark fiber, edge cloud services, internet protocol, managed security, software-defined wide area networks, secure access service edge, unified communications and collaboration, and optical wavelengths services; ethernet and VPN data networks services; and legacy services to manage cash flow, including time division multiplexing voice, private line, and other legacy services, as well as sells communication equipment, and IT solutions. The company also provides high speed and lower speed broadband service to residential and small business customers; local and long-distance voice services, professional services, and other ancillary services; and federal broadband and state support programs. It serves its products and services under the Lumen, Quantum Fiber, and CenturyLink brands. The company was formerly known as CenturyLink, Inc. and changed its name to Lumen Technologies, Inc. in September 2020. Lumen Technologies, Inc. was incorporated in 1968 and is headquartered in Monroe, Louisiana.

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.