Blucora (BCOR), one of our favorite stock picks, had an excellent run on the bourses with nearly 100% increase in its share during last one year. Blucora generates revenue from three main business streams which include search aggregation tool, online tax preparation tool (TaxAct) and selling electronic accessories online (Monoprice). It is important to note that both the businesses, TaxAct and Monoprice, were acquired to improve Blucora profitability.
Let’s take a look at a few of the fundamentals that drive Blucora stock:
Blucora has shown strong revenue growth. The annual revenues of Blucora more than doubled to $407 million in 2012 as compared to $208 million in 2009. The six-monthly revenue run rate stood at $283 million in 2013 and the FY 2013 revenue could be closer to $566 million. Even with a conservative approach, we anticipate the company’s Y/Y growth to be at 24%.
Source: Blucora revenue chart by Amigobulls
Blucora profitability (EBIT Margin %) witnessed an improvement of 6.6% from 2009 to 2013. The profitability seems to be ticking upwards due to acquisition of TaxAct. We predict the profitability of the company to improve further, given the additional profitability margin from the acquisition of Monoprice.
Given Blucora's current attractive valuation coupled with additional contribution to free cash flow ($65 million) from Monoprice, we believe that the stock price would witness further upside in the short-/medium-term.
We continue our positive outlook towards Blucora stock given the aforesaid factors. Blucora stock chart shows Blucora stock price movement.
Source: Blucora stock chart by Amigobulls
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