Analyzing Netflix (NFLX) & Blucora (BCOR)

Blucora (NASDAQ: BCOR) and Netflix (NASDAQ:NFLX) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for Blucora and Netflix, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Blucora 0 1 3 0 2.75
Netflix 2 13 26 0 2.59

Blucora currently has a consensus price target of $25.33, suggesting a potential upside of 8.26%. Netflix has a consensus price target of $178.90, suggesting a potential downside of 1.76%. Given Blucora’s stronger consensus rating and higher probable upside, research analysts clearly believe Blucora is more favorable than Netflix.

Profitability

This table compares Blucora and Netflix’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Blucora -8.03% 11.92% 5.43%
Netflix 3.55% 12.82% 2.55%

Risk and Volatility

Blucora has a beta of -0.18, suggesting that its stock price is 118% less volatile than the S&P 500. Comparatively, Netflix has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Earnings & Valuation

This table compares Blucora and Netflix’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Blucora $491.58 million 2.14 $92.46 million ($1.02) -22.94
Netflix $10.19 billion 7.72 $706.92 million $0.82 222.07

Netflix has higher revenue and earnings than Blucora. Blucora is trading at a lower price-to-earnings ratio than Netflix, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

90.2% of Blucora shares are owned by institutional investors. Comparatively, 81.1% of Netflix shares are owned by institutional investors. 14.1% of Blucora shares are owned by insiders. Comparatively, 4.9% of Netflix shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Netflix beats Blucora on 8 of the 13 factors compared between the two stocks.

About Blucora

Blucora, Inc. is a provider of technology-enabled financial solutions to consumers, small business owners and tax professionals. The Company operates through the Wealth Management and Tax Preparation segments. The Company’s Wealth Management segment consists of HD Vest, which provides financial advisors with an integrated platform of brokerage, investment advisory and insurance services to assist in making each financial advisor a financial service center for his/her clients The Company’s Tax Preparation segment provides digital do-it-yourself (DDIY) tax preparation solutions for consumers, small business owners and tax professionals. TaxAct, a provider of digital tax preparation solutions. HD Vest’s specialized model provides an open-architecture investment platform and technology tools to help financial advisors identify investment opportunities for their clients. TaxAct offers pricing and packaging options for tax professionals.

About Netflix

Netflix, Inc. is a provider an Internet television network. The Company operates through three segments: Domestic streaming, International streaming and Domestic DVD. The Domestic streaming segment includes services that streams content to its members in the United States. The International streaming segment includes services that streams content to its members outside the United States. The Domestic DVD segment includes services, such as digital optical disc (DVD)-by-mail. The Company’s members can watch original series, documentaries, feature films, as well as television shows and movies directly on their Internet-connected screen, televisions, computers and mobile devices. It offers its streaming services both domestically and internationally. In the United States, its members can receive DVDs delivered to their homes. The Company had members streaming in over 190 countries, as of December 31, 2016.

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