Blucora Is More Undervalued Than It Looks On Paper

With Blucora Inc BCOR shares up more than 50 percent, year-to-date, Benchmark’s Daniel L. Kurnos noted that the stock had not benefited to the same degree as other financials following the surprising result of the presidential election.

Kurnos maintains a Buy rating on the company, while raising the price target from $16 to $18.

Undervalued Stock

“We acknowledge that some of the financial optimism may end up being overblown, but the landscape seems primed for Blucora to continue reporting upside surprises, beginning with 4Q results in late January/early February,” the analyst mentioned.

Kurnos believes the internal improvements at Blucora, especially the recent addition of a robo-advisory offering to the tax platform, could drive further upside to what now appear to be conservative estimates.

“And, with ongoing corporate cost cutting plus a currently elevated level of corporate expense, we believe shares are intrinsically cheaper than they appear on paper,” the analyst went on to say.

Well Positioned

Apart from the sharp market rally following the surprising election results, Kurnos pointed out that both of Blucora’s businesses were well positioned to benefit under President-elect Trump.

“Most notably, financial deregulation and a suspension or elimination of the impending DOL fiduciary rule would greatly benefit HD Vest, while a simplification of the tax code could theoretically drive a material increase in DIY tax filers,” the analyst explained.

At last check, shares of Blucora were up 1.99 percent and trading at $15.40.