BCOR Stock: Turning Taxes into Opportunity

blucora stock
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Blucora Stock to Grow Further on Industry Outlook

Today’s stock represents another of our preferred methods of investing in growth stocks. Stocks of companies that are well-positioned to capitalize on a focused segment of a market and are growing well stand to gain in the coming years. Although such stocks carry greater risk, they also stand to make higher returns for their investors over the long term.

The case in point being Blucora Inc (NASDAQ:BCOR), which aims to turn taxes into opportunity. The company’s tax-smart solutions help people achieve their financial goals by managing their largest expenses—taxes. According to the company, Americans spend more on taxes than on their groceries, clothing, and mortgage combined. Yet, not many firms focus on tax. This is the gap Blucora wants to exploit.  

Blucora helps consumers manage their financial lives through its two products, “HD Vest” and “TaxAct,” which enable them to optimize taxes. These products dominate the industry and have helped Blucora stock in moving upwards gradually.

The wealth management solutions provided by HD Vest help advisors deliver tax-smart wealth management to their clients. HD Vest does this through an integrated platform of brokerage, investment advisory, and insurance services, which enable financial advisors to assist their clients effectively.

TaxAct provides affordable digital tax preparation solutions for consumers, tax professionals, and small business owners. Through its online tax software solution, consumers and professionals get to manage their taxes in a simple, affordable, and accurate manner.

For many people, taxes mean stress and anxiety. But Blucora wants to change this by empowering people with the knowledge, tools, and services that help them use their taxes to improve their financial future.

Take the example of TaxAct, which is a simple online tax filing system. It lets people easily file their own taxes besides discovering opportunities for tax savings. Just last week, TaxAct rolled out a mobile app to make it easier and faster for customers to electronically file their tax returns. The app is available for both smartphones and “iPad” and “Android” tablet users, who can efficiently file their taxes from start to finish. According to the company management, the mobile app shall help in bringing peace of mind as it would help them identify the right tax forms. (Source: “TaxAct launches enhanced mobile app,” Blucora Inc, February 28, 2018.)

This is a step in the right direction as the tax preparation services industry has been undergoing many changes of late. It has been growing over the last five years as more Americans file tax returns, but the industry landscape is shifting as more people prefer online services such as e-filing. (Source: “Tax Preparation Services – US Market Research Report,” IBISWorld, October 2017.)

Blucora is preparing itself well to take advantage of the opportunities presented in this market. As more people start moving toward digital filing and get comfortable with using such tools and applications, the demand for Blucora solutions shall continue to climb higher, thus boosting BCOR stock.

The company also divested its Search and Content and E-Commerce businesses in 2016 as part of its strategic transformation. The tax specialist has been improving its financials as well, which has helped Blucora stock.

The company announced fourth-quarter and full-year 2017 results last month. The revenue reported was $97.8 million, an increase of 13% year-over-year. Blucora achieved its 20th consecutive year of revenue growth at TaxAct, which reported a growth of 15% year-over-year. (Source: “BLUCORA REPORTS FOURTH QUARTER AND FULL YEAR 2017 RESULTS,” Blucora, February 18, 2018.)

The CEO, John Clendening, said that the momentum they have seen throughout the year continued into the fourth quarter. He further said that for the full year, the company achieved double-digit growth in nearly all of its key metrics and that it is on or ahead of schedule as it finalizes its strategic transformation.

The stock has gone up by over 45% in the last one year. It has not been a smooth ride for BCOR stock as is clear from the stock chart below. However, the company’s transformation is bearing fruit, and with the recent strong quarterly performance, Blucora is set to report further gains in future.  

blucora stock

Chart courtesy of StockCharts.com

Analyst Take

Blucora has been upping its game and its business portfolio is positioned with significant organic growth opportunities. It has a differentiated business model with many competitive advantages. Its diversified revenue streams have multiple growth drivers and with the industry expected to grow further, the future looks bright for BCOR stock. Investors could consider the stock for the long term.