Bandwidth Inc. (BAND) vs StoneCo Ltd. (STNE)

Bandwidth Inc. and StoneCo Ltd. are both Software Infrastructure companies. StoneCo Ltd. is the larger, with a market value of $2.3B against $2.0B — 1.1× the size. StoneCo Ltd. trades at the lower P/E: 3.7× against 1,022×. Bandwidth Inc. grew revenue faster over the last twelve months: 9.25% against 8.71%. StoneCo Ltd. has the higher net margin (24.1% vs 0.27%) and the higher return on invested capital (27.2% vs −1.77%). Across the 22 metrics below, StoneCo Ltd. leads on 19 and Bandwidth Inc. on 3.

Valuation

Metric BAND STNE Software Infrastructure median
P/E 1,022.33 3.68 28.02
P/S 2.38 0.83 3.07
P/B 4.96 1.25 3.36
Price to free cash flow 29.25 3.06 17.12
EV/EBITDA 41.35 2.32 14.91
EV/Sales 2.63 1.31 3.03
Earnings yield 0.10% 27.20% 0.13%
Free cash flow yield 3.42% 32.72% 1.15%

Profitability

Metric BAND STNE Software Infrastructure median
Gross margin 37.23% 73.59% 61.23%
Operating margin (1.82%) 49.68% 0.00%
Net margin 0.27% 24.12% 0.00%
Free cash flow margin 8.13% 27.20% 1.67%
Return on equity 0.58% 33.67% 0.59%
Return on assets 0.21% 6.10% 0.00%
Return on invested capital (1.77%) 27.16% 0.00%

Growth

Metric BAND STNE Software Infrastructure median
Revenue growth (TTM) 9.25% 8.71% 13.41%
EPS growth (last fiscal year) (79.17%) 265.22% —
Revenue growth, 5-year CAGR 17.05% 31.53% 15.81%
Net income growth, 5-year CAGR 0.00% 20.77% 0.00%

Health

Metric BAND STNE Software Infrastructure median
Debt to equity 0.87 1.80 0.06
Current ratio 2.04 1.26 1.55
Net debt to EBITDA 3.09 1.18 0.08

Dividend

Metric BAND STNE Software Infrastructure median
Dividend yield — — 1.53%
Payout ratio 0.00 0.00 0.00

Size

Metric BAND STNE Software Infrastructure median
Market cap 1.99b 2.26b 835.96m

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