Please ensure Javascript is enabled for purposes of website accessibility

Why Brightcove Stock Plunged Today

By Chris Neiger – Jul 29, 2021 at 3:40PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors aren't happy with management's full-year revenue guidance.

What happened 

Shares of Brightcove, Inc. (BCOV -2.15%), a cloud-based video platform company, tumbled today after it reported second-quarter 2021 results late yesterday. Although the company beat Wall Street's consensus earnings and revenue estimates, investors appear to be unhappy with the its third-quarter and full-year outlook.

The tech stock fell by as much as 18.2%, and was down by 16.1% as of 3:03 p.m. EDT.

So what 

Brightcove's revenue increased by 7% to $51.5 million in the second quarter, outpacing analysts' consensus estimate of $50.1 million. Additionally, the company blew past Wall Street's non-GAAP earnings estimate of $0.03 per share and instead reported earnings of $0.11 per share. 

A white line graph on a blue background.

Image source: Getty Images.

Jeff Ray, Brightcove's CEO, said in a press release that, "Brightcove's second quarter performance was highlighted by revenue that was ahead of expectations and 33% growth in adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization]."

But despite the company's quarterly revenue and earnings beat, investors were quick to sell the company's stock today. That's likely because management said that revenue in the third quarter would be in the range of $50.5 million to $51.5 million, which falls short of the $52.5 million that analysts were estimating.

Additionally, Brightcove said its full-year revenue will be $213 million at the high end of guidance, which again falls short of analysts' consensus estimate of $214.9 million for the year.  

Investors were also likely reacting to the fact that two analysts lowered their price targets for Brightcove stock today. An analyst at Lake Street lowered its price target from $25 to $17, while Northland analyst Michael Latimore lowered its target price from $29 to $23.

Now what 

With the company providing lower-than-expected revenue guidance for the third quarter and full-year 2021, investors may want to be cautious with Brightcove's stock right now. The company's share price has been very volatile this year and has fallen nearly 40% year to date.

Investors may want to watch Brightcove's next few quarterly-earnings reports closely before making a decision about investing in the company. 

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Brightcove Stock Quote
$5.45 (-2.15%) $0.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.