Home Search optimization Is Bridgeline Digital a Good Tech Stock to Buy?

Is Bridgeline Digital a Good Tech Stock to Buy?


Digital engagement company Bridgeline Digital, Inc. (BLIN) is known for its award-winning Bridgeline Unbound experience management platform, formerly known as iAPPS. The stock of Burlington, Massachusetts Company rose 246.3% over the past month to close Friday’s trading session at its 52-week high of $ 8.97. This 56% rally in the last trading session can be attributed mainly to investor optimism about the increase in the company’s cash balance compared to its mandates. BLIN announced on July 2 that it received more than $ 2.5 million in cash upon exercising its warrants, bringing its cash balance to approximately $ 6 million.

The company’s acquisition of WooRank and HawkSearch in 2021 also contributed to its growth, with WooRank driving traffic to websites by helping improve search engine optimization, and HawkSearch increasing online revenue from search sites. e-commerce by increasing conversion and optimizing the search experience for visitors.

However, BLIN incurred losses in its last reported quarter (ended March 31, 2021). In addition, he priced a registered direct offer for gross proceeds of $ 5.1 million, which is expected to result in dilution of the shares. Thus, the short-term outlook for BLIN appears uncertain.

Click here to view our Software Industry Report for 2021

Here is what we believe could influence BLIN’s performance in the coming months:

Growing demand for Celebros around the world

BLIN announced on May 18 that a popular Indonesian supermarket chain has chosen Celebrities to reinvent their online shopping experience. Additionally, a popular Irish bookseller picked Celebros in April 2021 to tackle smart search on their website. The company’s search solution was also chosen by Indonesia’s largest toy store chain to elevate its new e-commerce site to Magento 2.

A large decorative lighting manufacturer and retailer in India chose Celebros Search as the site search solution for its online store in December of last year. And a European home and hardware company chose Celebros Search in December 2020 as the site search and merchandising solution for its online store.

Mixed finance

For its second quarter of fiscal 2021, ended March 31, BLIN’s subscription and perpetual license revenue grew 8.2% year-on-year to $ 1.99 million, but its revenue from services digital engagement decreased 1.6% year-on-year to $ 885,000. Its gross profit for the quarter increased 16.3% year-over-year to $ 1.81 million. However, BLIN’s net loss amounted to $ 556,000 in the quarter, compared to net income of $ 822,000 in the previous year quarter. Its loss per share was $ 0.11 compared to EPS of $ 0.17 during the period last year.

Unfavorable analysts’ estimates

Analysts expect BLIN’s revenue to increase 23.5% for the quarter ended June 30, 2021 and 18% in its 2021 fiscal year. However, the company’s EPS is expected to decline by 116.7% for the quarter ending September 30, 2021 and remain negative. in 2021 and 2022. Additionally, Wall Street analysts expect the stock to hit $ 5.25 in the near term, indicating a potential drop of 41.5%.

POWR ratings don’t indicate enough upside

BLIN has an overall rating of C, which equates to Neutral in our POWR odds system. POWR scores are calculated by considering 118 different factors, each factor being weighted to an optimal degree.

Our proprietary scoring system also rates each stock against eight different categories. Among these categories, BLIN has a C rating for stability, which is justified given its beta of 2.92.

The stock has a C grade for quality, which is consistent with its negative values ​​for ROCE and ROTA over the past 12 months compared to respective industry averages of 6.86% and 3.22%. BLIN has a D rating for sentiment, in line with negative sentiment from analysts.

BLIN is ranked n ° 28 out of 60 stocks in the Software – Company industry. Click on here to view additional POWR ratings for BLIN (momentum, growth and value).

Better than BLIN: Click here to access the 14 best rated stocks in the same sector.

Final result

While BLIN’s revenue is expected to increase, it is experiencing losses and is expected to continue to do so for some time. Thus, we believe it is wise to wait for a better point of entry into the stock.

Click here to view our Software Industry Report for 2021

BLIN stock was trading at $ 12.45 per share on Tuesday morning, up $ 3.48 (+ 38.80%). Year-to-date, BLIN has gained 382.56%, compared to a 16.65% increase in the benchmark S&P 500 over the same period.

About the Author: Manisha Chatterjee

Since she was young, Manisha has had a strong interest in the stock market. She majored in economics at university and has a passion for writing, which led to his career as a research analyst. After…

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