Blucora (BCOR) Intrinsic Value Above $19/sh, Says Benchmark

Benchmark maintained a Buy rating on Blucora Inc. (NASDAQ: BCOR) with a modified price target of $29.00 (from $30.00). Shares declined after the company announced Q1 results and guidance. Analyst Daniel L. Kurnos commented on the fall.

"Shares of Blucora (BCOR-Buy) are likely primed to continue their downward move following decent 1Q results, which included upside from Tax, as a technology shift in Search is set to significantly depress FY14 results. We now expect total Search revenue could decline by 15% y/y vs. management’s prior guidance of low-single digit growth, driven by replatforming effort to comply with Google’s (GOOG-Not Rated) enforced shift to their developing Custom Search Ads (CSA) client side application," said Kurnos.

"We believe 2Q is still set to be the trough but the reduction in our revenue forecast along with further expected Search margin compression could result in a 2.5% y/y EBITDA decline for the year despite almost 500 bps of Tax margin expansion. However, even with this expected headwind, we believe shares have an intrinsic value of $19 based on the Tax business and PV of the NOLs alone, with the Tax upside driving only a modest $1 reduction from our previous target of $30 and potential M&A and an enhanced buyback serving as near-term catalysts," he added.

For an analyst ratings summary and ratings history on Blucora Inc. click here. For more ratings news on Blucora Inc. click here.

Shares of Blucora Inc. closed at $19.43 yesterday.

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