- Brightcove’s stock fell 38% to $6.38 on July 24, when it reduced its 2014 revenues and earnings outlook. The cut in outlook was modest. Second-quarter results actually exceeded guidance.
- BCOV’s fall was exacerbated by the resignation of its CFO, which raises concerns about hidden accounting or financial problems. Although disclosures should be improved, I found no proof of problems.
- With a recent acquisition and operating losses, BCOV’s cash position has dropped sharply this year. If the cash burn does not end soon, BCOV will need to raise capital.
- According to Frost & Sullivan, BCOV’s core market is expected to double by 2019 (in five years).
- Although BCOV looks expensive by traditional valuation measures, the stock still has upside (to my $15 target), assuming that no problems emerge and the company moves steadily toward profitability.