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Benefitfocus Will Continue To Have Difficulties This Year

May 03, 2020 4:31 AM ETVoya Financial, Inc. (VOYA)6 Comments


  • The company recently announced U.S. layoff of 17% of employees plus executive salary cuts.
  • Guidance for FY20 has been reduced substantially, with original revenue guidance of $310-$310M reduced to $250-$270M.
  • The company has negative total common equity which tends to produce substandard stock performance.
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Benefitfocus, Inc. (BNFT) is a stock that has been pummelled over the last year and a half. In February 2019 the stock price touched $60. Today it trades for little more than $10.

Benefitfocus stock chart

(Source: Yahoo Finance/MS Paint)

Benefitfocus is likely to experience further discomfort due to workforce reductions as a result of mandated shutdowns due to the pandemic. The company operates in the HCM industry with more than 18% market share of the benefits administration niche.

2018 Benefits Administration Applications Market Shares Split By Top 10 Benefits Administration Vendors and Others, %

(Source: Apps Run The World)

Benefitfocus is definitely hurting in this economic climate, evidenced by the company's decrease in guidance for FY20 with expected revenue of $250-$270M down from $310-$310M. It is also cutting costs, including executive pay, and is reducing its U.S. workforce by 17%.

Community Resource Center

The Community Resource Center is a recent initiative by Benefitfocus that assists companies through all work stages. The solution will have:

  • An automated off-boarding experience that connects affected individuals to affordable medical plan alternatives and voluntary benefit products
  • The ability to reactivate staff when business circumstances allow for return-to-normal business operations
  • Guidance on workforce changes through information, education and communication tools on available options that impact the business and the individual
  • Ability to easily change eligibility status of employees through various categories and back.

Hats off to Benefitfocus as this appears to be a very useful initiative during this time of crisis.


Benefitfocus has also announced an initiative that allows employees of customers that have been affected by the current economic conditions to have access to a variety of affordable individual and family health plans:

for employees who have been offered COBRA by their employers and are seeking lower-cost alternatives, as well as a variety of other products and services to support the well-being of displaced workers through this time of crisis and beyond.

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This article was written by

Steve Auger profile picture
Invest in high growth software stocks now

I have been trading stocks, commodities, and options for more than 25 years. I have honed my skills in quantitative analysis and various stock investment tools for 15 years at Portfolio123 and offer services as a consultant in stock portfolios. I also own the financial data service Equity Analytx which provides aggregated fundamentals for a wide range of industries.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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