Is Brightcove a Winning Software Stock? As more and more companies migrate their businesses to the cloud, this cutting edge technology is here to stay. The company's that provide cloud products and services should see their stock's rise over the long-term, but not every stock is a buy right now. In this article, Patrick Ryan covers a lesser known cloud, Brightcove (BCOV), with bright prospects.
By Patrick Ryan •
This story originally appeared on StockNews
Brightcove (BCOV) provides cloud content services for digital media purposes. BCOV's value offerings include Brightcove Video Cloud that serves as a web-based video platform. The company also provides Brightcove App Cloud, a platform for software application and management.
BCOV solutions are provided to a wide array of customers, including those in the education, financial services, tech, retail, government, and media spaces. BCOV calls Cambridge, Massachusetts its home, yet the company's customers are located throughout the world.
BCOV appears to have a solid value proposition that will likely be in demand for years and decades ahead. Is BCOV a winner in the short-term and the long term? Let's find out.
BCOV Points of Note
BCOV has been on a roll across the prior six months and throughout the previous year. The stock has jumped from $12.32 in November to its current price of $19 and change. Rewind back to the summer of 2020, and you will find the stock traded as low as $8. Though BCOV has slipped in the past month, dropping from $22.22 in mid-April to $18.40 on April 20, the stock subsequently bounced right back toward $20.
BCOV has a forward P/E ratio of 38.61, a figure that is a bit concerning. However, BCOV's business is primarily centered on the cloud and cutting-edge technology, so its elevated forward P/E ratio is less concerning. It must be noted that BCOV is currently priced about $6 below its 52-week high.
BCOV's fourth-quarter sales came in better than expected. Wall Street analysts had expected earnings of 6 cents per share. BCOV delivered 14 cents per share. Furthermore, BCOV's $53.7 million fourth-quarter revenue beat analysts' expectations of $49.8 million. BCOV boasts an impressive yearly subscription revenue of $97,200 for each premium level customer. The figure was up about $15,000 from the same quarter one year ago. Of the company's 3,000+ customers, more than 2,200 of them are premium-level customers.
If everything goes according to plan, BCOV will achieve earnings per share growth of over 41%. The company's growth rate across the long-term is 15%. BCOV's estimates continue to rise in response to its better-than-expected earnings and forecasts for the quarters ahead.
BCOV According to Analysts
Analysts are bullish on BCOV, setting an average target price of $28.67 for the stock. If BCOV increases to this level, it will have popped by more than 43%. The highest analyst target price for the stock is $30. Of the three analysts who have issued recommendations for BCOV, one considers it a Strong Buy, and two consider it a Buy.
BCOV POWR Ratings
BCOV is a POWR Ratings beast with an overall grade of A, indicating it is a Strong Buy. BCOV has an A grade in the Sentiment and Growth components of the POWR Ratings. The stock also has a B grade in the Value component. Click here to find out how BCOV grades out in the Momentum, Quality, and Stability components.
Of the 119 publicly traded stocks in the Software - Application industry, BCOV is ranked 6th. Click here to find other top stocks in this industry.
Is BCOV a Winner?
BCOV is a winner. The stock is a POWR Ratings stud with better than average grades in most POWR Rating components. Analysts have high hopes for this cloud stock, partially because its subscription-based business model is likely to generate reliable revenue in the quarters and years ahead. Add in the fact that BCOV is ranked just outside of the top five of the stocks in its industry, and investors have even more reason to consider a position in this emerging cloud superstar.
BCOV shares were unchanged in premarket trading Wednesday. Year-to-date, BCOV has gained 5.87%, versus a 12.06% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
