January 18, 2022

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Brightcove Inc. Just Reported, And Analysts Assigned A US$13.33 Price Target

Brightcove Inc. (NASDAQ:BCOV) came out with its yearly results last week, and we wanted to see how the business is performing and what top analysts think of the company following this report. It was a respectable set of results; while revenues of US$184m were in line with analyst predictions, statutory losses were 18% smaller than expected, with Brightcove losing US$0.58 per share. Earnings are an important time for investors, as they can track a company’s performance, look at what top analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Brightcove

NasdaqGS:BCOV Past and Future Earnings, February 21st 2020

Following the latest results, Brightcove’s three analysts are now forecasting revenues of US$194.5m in 2020. This would be a satisfactory 5.4% improvement in sales compared to the last 12 months. Statutory losses are forecast to balloon 65% to US$0.20 per share. In the lead-up to this report, analysts had been modelling revenues of US$202.3m and earnings per share (EPS) of US$0.08 in 2020. There looks to have been a significant drop in sentiment regarding Brightcove’s prospects after these latest results, with a minor downgrade to to revenues and analysts now forecasting a loss instead of a profit.

The consensus price target fell 8.0% to US$13.33, with analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Brightcove, with the most bullish analyst valuing it at US$14.00 and the most bearish at US$12.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.

Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. We would highlight that Brightcove’s revenue growth is expected to slow, with forecast 5.4% increase next year well below the historical 7.1%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Brightcove to grow slower than the wider market.

The Bottom Line

The most important thing to take away is that analysts are expecting Brightcove to become unprofitable next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.

With that in mind, we wouldn’t be too quick to come to a conclusion on Brightcove. Long-term earnings power is much more important than next year’s profits. We have estimates – from multiple Brightcove analysts – going out to 2021, and you can see them free on our platform here.

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