Critical Survey: Informatica (NYSE:INFA) versus Bandwidth (NASDAQ:BAND)

Bandwidth (NASDAQ:BAND) and Informatica (NYSE:INFA) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Earnings and Valuation

This table compares Bandwidth and Informatica’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bandwidth	$662.03 million	0.70	-$16.34 million	($1.12)	-15.28
Informatica	$1.64 billion	4.39	-$125.28 million	($0.02)	-1,223.50

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

Insider and Institutional Ownership

68.5% of Bandwidth shares are held by institutional investors. Comparatively, 98.4% of Informatica shares are held by institutional investors. 6.2% of Bandwidth shares are held by insiders. Comparatively, 48.1% of Informatica shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bandwidth	-3.21%	-1.92%	-0.52%
Informatica	9.60%	6.16%	2.70%

Analyst Recommendations

This is a summary of current ratings for Bandwidth and Informatica, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bandwidth	1	3	5	0	2.44
Informatica	0	4	7	0	2.64

Bandwidth currently has a consensus target price of $25.71, indicating a potential upside of 50.29%. Informatica has a consensus target price of $32.55, indicating a potential upside of 33.00%. Given Bandwidth’s higher probable upside, equities research analysts clearly believe Bandwidth is more favorable than Informatica.

Risk and Volatility

Bandwidth has a beta of 1.48, meaning that its share price is 48% more volatile than the S&P 500. Comparatively, Informatica has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.

Summary

Informatica beats Bandwidth on 10 of the 14 factors compared between the two stocks.

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.

About Informatica

Informatica Inc. develops an artificial intelligence-powered platform that connects, manages, and unifies data across multi-vendor, multi-cloud, and hybrid systems at enterprise scale worldwide. Its platform includes a suite of interoperable data management products, including data integration products to ingest, transform, and integrate data; API and application integration products that enable users to create and manage APIs and integration processes for app-to-app synchronization, business process orchestration, B2B partner management, application development, and API management; data quality and observability products to profile, cleanse, standardize, observe, and monitor data to deliver accurate, complete, and consistent data; and master data management products to create an authoritative single source of truth of business-critical data. The company's platform also includes customer and business 360 application that allow business analysts to create 360-degree views of business data domains like customer, product, supplier, reference, and finance with simplified business user experiences; data catalog products that enables customers to quickly find, access, and understand enterprise data using a simple Google-like search experience; governance and privacy products that help users define policies, govern data, and ensure compliance with industry and corporate policies; and a data marketplace that delivers cloud shopping experience for data consumers and enables data sharing and AI models across organizations to facilitate data-driven decision making. It also offers maintenance and professional services. The company sells its products through its direct sales team. The company was founded in 1993 and is headquartered in Redwood City, California.