) has watched earnings momentum for this year jump by more than
100% over the past 90 days, as this provider of online search and
tax preparation software has strung together three straight
positive earnings surprises. Most recently, it beat by more than
240% in the second quarter of 2012. It will report again in the
first week of November. This Zacks #1 Rank (Strong Buy) also has a
long-term projected growth rate of 20%, which makes it a solid
Strong Second Quarter
On July 26, Blucora reported that second quarter earnings surged
200% year over year to 48 cents per share, exceeding the Zacks
Consensus Estimate by 242.9%.
Revenue jumped 85.8% from the comparable year-ago quarter to $100.9
million, topping the Zacks Consensus Estimate of $95.0 million. The
better-than-expected growth was driven by a solid performance from
search (up 51% year over year). Tax preparation revenues were $19.1
million in the quarter.
The strong second quarter results encouraged Blucora to provide a
positive guidance for the third quarter of 2012, which should be
announced November 7. Revenue is expected between $90.0 million and
$93.0 million, and non-GAAP earnings are expected at 19 cents to 23
cents per share.
Earnings Estimates Move Higher
For 2012, the Zacks Consensus Estimate jumped 110.5% to 80 cents
over the last 90 days, reflecting year-over-year earnings growth of
For 2013, the Zacks Consensus Estimate soared 56.5% to $1.08 in the
same time, reflecting 35.4% earnings growth.
Currently, Blucora is trading at a slight premium to most of its
peers on a forward P/E basis. However, its strong earnings growth
expectation of 20.0% over the next five years compares favorably
with the industry average of 17.5%, indicating room for further
expansion. Moreover, its PEG ratio of 1.1 is lower than the
industry average of 1.5.
Historically, share prices have shown a positive correlation to
earnings growth. The uptrend in 2012 earnings estimates should
encourage investors as the stock is likely to follow the trend.
Founded in 1966, Blucora changed its name from Infospace Inc. in
June 2012. Headquartered in Bellevue, Washington, Blucora provides
web search tools through its websites namely Dogpile.com,
WebCrawler.com, MetaCrawler.com, and WebFetch.com. Blucora also
provides online tax preparation services through the acquisition of
TaxACT Holdings in January 2012. The company has a market capital
of $712.8 million.
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