Shareholders in Bandwidth Inc. (NASDAQ:BAND) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the current consensus from Bandwidth's nine analysts is for revenues of US$452m in 2021 which - if met - would reflect a huge 55% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 98% to US$0.024. Yet before this consensus update, the analysts had been forecasting revenues of US$339m and losses of US$0.32 per share in 2021. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

See our latest analysis for Bandwidth

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Bandwidth's rate of growth is expected to accelerate meaningfully, with the forecast 55% revenue growth noticeably faster than its historical growth of 16% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Bandwidth to grow faster than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Bandwidth is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. More bullish expectations could be a signal for investors to take a closer look at Bandwidth.

Analysts are clearly in love with Bandwidth at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 1 other flag we've identified .

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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