Brightcove (BCOV) vs. HubSpot (HUBS) Critical Review

Brightcove (NASDAQ: BCOV) and HubSpot (NYSE:HUBS) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Volatility & Risk

Brightcove has a beta of 1.86, suggesting that its share price is 86% more volatile than the S&P 500. Comparatively, HubSpot has a beta of 2.24, suggesting that its share price is 124% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Brightcove and HubSpot, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brightcove 0 1 2 0 2.67
HubSpot 0 2 13 0 2.87

Brightcove currently has a consensus target price of $8.42, suggesting a potential upside of 24.69%. HubSpot has a consensus target price of $84.21, suggesting a potential downside of 7.51%. Given Brightcove’s higher possible upside, equities analysts clearly believe Brightcove is more favorable than HubSpot.

Earnings and Valuation

This table compares Brightcove and HubSpot’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brightcove $150.27 million 1.56 -$9.98 million ($0.66) -10.23
HubSpot $270.97 million 12.56 -$45.56 million ($1.16) -78.49

Brightcove has higher earnings, but lower revenue than HubSpot. HubSpot is trading at a lower price-to-earnings ratio than Brightcove, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Brightcove and HubSpot’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brightcove -14.58% -25.11% -13.88%
HubSpot -12.16% -21.93% -7.61%

Insider and Institutional Ownership

62.8% of Brightcove shares are held by institutional investors. Comparatively, 94.5% of HubSpot shares are held by institutional investors. 12.7% of Brightcove shares are held by insiders. Comparatively, 12.1% of HubSpot shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

HubSpot beats Brightcove on 9 of the 13 factors compared between the two stocks.

About Brightcove

Brightcove Inc. is a global provider of cloud-based services for video. The Company’s products and services include Brightcove Video Cloud (Video Cloud), Brightcove Zencoder (Zencoder), Brightcove Once (Once), Brightcove Perform (Perform), Brightcove Video Marketing Suite (Video Marketing Suite), Brightcove Lift (Lift), Brightcove OTT Flow (OTT Flow) and Brightcove Enterprise Video Suite (Enterprise Video Suite), among others. Video Cloud is an online video platform. Video Cloud enables its customers to publish and distribute video to Internet-connected devices. Zencoder is a cloud-based video encoding service. Once is a cloud-based advertisement insertion and video stitching service. Perform is a cloud-based service for creating and managing video player experiences. Video Marketing Suite is a suite of video technologies designed to address the needs of marketers to drive awareness, engagement and conversion.

About HubSpot

HubSpot, Inc. (HubSpot) provides a cloud-based marketing and sales software platform. The Company’s software platform features integrated applications to help businesses attract visitors to their Websites, convert visitors into leads, close leads into customers and delight customers so that they become promoters of those businesses. These integrated applications include social media, search engine optimization, blogging, Website content management, marketing automation, e-mail, sales productivity, customer relationship management (CRM), analytics and reporting. The Company’s products include HubSpot Marketing, HubSpot CRM and HubSpot Sales. The Company offers Professional Services and support. It offers professional services to educate and train customers on how to leverage its software platform and inbound marketing methodology to transform how their business attracts, engages and delights customers.

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