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Brightcove Hits 52-Week High, Customer Wins Key Catalyst

Share price of Brightcove Inc. BCOV rallied to a new 52-week high of $13.06, eventually closing a tad bit lower at $13.02 on Sep 1. This represents a massive one year return of approximately 149%, better than the S&P 500’s 11.3% over the same period.

Currently, Brightcove holds a Zacks Rank #3 (Hold). Notably, the stock has a market cap of $426.3 million.

Key Factors

Brightcove is a provider of cloud content services for the publishing and the distributing of professional digital media. The ever changing consumer viewing habit and a few new business models are driving disruption in the market. This presents significant growth opportunity for the company, in our view.

Brightcove has been a consistent performer in recent times courtesy of its strategic investments in developing innovative products. Moreover, expanding sales force has been a key growth driver. Notably, Brightcove has outperformed the Zacks Consensus Estimate by an average of 61% in the last four trailing quarters.

BRIGHTCOVE Price and Consensus


BRIGHTCOVE Price and Consensus | BRIGHTCOVE Quote

At the end of second quarter of 2016, customer count was 4,774, of which 1,926 were classified as premium customers. Average revenue per premium customer was $69,000, up 8% on a year-over-year basis.

The growth was primarily driven by new customer wins. During the second quarter, the company signed separate multi-year, multi-million dollar agreements with two large Japanese media companies. Total committed value of the deal is worth $10 million over a period of 3.5 years.

Moreover, new and expanded agreements with the likes of AMC, Bounce TV, Fox Plus, Express Newspapers, Le Parisien, Pluto TV, Ringier AG, TV Dorama, TV5Monde Asia, Woven Digital and Yelp demonstrate the company’s growing clout in the market.

Additionally, partnerships with the like of Eloqua and Marketo continue to add value to Brightcove’s footprint in the digital marketing business. The company won contracts from the likes of Angie's List, Comodo, Jardine Matheson, Keurig Green Mountain, Lush Cosmetics, Morningstar, Omron, Rolls Royce, SAS, and Xero, among others, in this segment.

Estimate Revisions

The Zacks Consensus Estimate for fiscal 2016 has remained steady at a loss of 13 cents over the last 30 days. Also, for fiscal 2017, estimates have remained steady, standing at a loss of 10 cents over the same time frame.

Key Sector Picks

Better-ranked stocks in the broader technology sector include Everyday Health EVDY, Changyou.com CYOU and Shutterstock SSTK. While Everyday sports a Zacks Rank #1 (Strong Buy), both Changyou and Shutterstock have a Zacks Rank #2 (Buy).

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