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Should Value Investors Buy Blucora (BCOR) Stock?

Zacks Equity Research
·2 min read

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Blucora (BCOR). BCOR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BCOR has a P/S ratio of 0.87. This compares to its industry's average P/S of 1.47.

Finally, investors should note that BCOR has a P/CF ratio of 6.65. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. BCOR's P/CF compares to its industry's average P/CF of 8.92. Over the past year, BCOR's P/CF has been as high as 22.35 and as low as 4.63, with a median of 14.34.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Blucora is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BCOR feels like a great value stock at the moment.


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Zacks Investment Research