Contrasting Brightcove (NASDAQ:BCOV) and Phunware (NASDAQ:PHUN)

Brightcove (NASDAQ:BCOV) and Phunware (NASDAQ:PHUN) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.

Institutional & Insider Ownership

87.2% of Brightcove shares are owned by institutional investors. Comparatively, 23.2% of Phunware shares are owned by institutional investors. 2.3% of Brightcove shares are owned by company insiders. Comparatively, 22.9% of Phunware shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Brightcove has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Phunware has a beta of 15.97, suggesting that its share price is 1,497% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Brightcove -9.93% -3.07% -1.26%
Phunware -80.97% -266.76% -44.72%

Valuation & Earnings

This table compares Brightcove and Phunware’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brightcove $184.46 million 2.26 -$21.90 million ($0.17) -62.24
Phunware $19.15 million 3.19 -$12.87 million ($0.35) -4.26

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Brightcove and Phunware, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brightcove 0 0 3 0 3.00
Phunware 0 1 1 0 2.50

Brightcove currently has a consensus target price of $14.00, indicating a potential upside of 32.33%. Phunware has a consensus target price of $4.00, indicating a potential upside of 168.46%. Given Phunware’s higher possible upside, analysts plainly believe Phunware is more favorable than Brightcove.

Summary

Brightcove beats Phunware on 8 of the 14 factors compared between the two stocks.

Brightcove Company Profile

Brightcove Inc. provides cloud-based services for video. It offers Video Cloud, an online video platform that enables its customers to publish and distribute video to Internet-connected devices. The company also provides Zencoder, a cloud-based video encoding service for file support, quality and control, speed and reliability, platform and security, and account and integration; SSAI, a cloud-based ad insertion and video stitching service; and Player, a cloud-based service for creating and managing video player experiences. In addition, it offers Video Marketing Suite, a suite of video technologies to address the needs of marketers to drive awareness, engagement, and conversion; OTT Flow, a service for media companies and content owners to deploy direct-to-consumer, live and on-demand video services across platforms; and Enterprise video suite, an enterprise-class platform for internal communications, employee training, live streaming, marketing, and e-commerce videos. Further, the company provides account management, professional, support, and online and onsite training services. It serves media companies, broadcasters, publishers, sports and entertainment companies, fashion and hospitality brands and corporations, faith-based institutions, e-commerce platforms, and hi-tech organizations; and governments, educational institutions, and non-profit organizations through direct sales, referral partners, channel partners, and resellers in North America, Europe, Japan, the Asia Pacific, and internationally, as well as sells its products online. The company was formerly known as Video Marketplace, Inc. and changed its name to Brightcove Inc. in March 2005. Brightcove Inc. was founded in 2004 and is headquartered in Boston, Massachusetts.

Phunware Company Profile

Phunware Inc., together with its subsidiaries, provides Multiscreen-as-a-Service (Maas) and Data-as-a-Service (DaaS) enterprise software platform for mobile devices. Its platform enables brands to engage, manage, and monetize their mobile application portfolios. The company offers Cloud-Based Mobile Software Development Kits (SDKs), which include location-based services, mobile engagement, content management, messaging, advertising, and analytics; and mobile application framework of pre-integrated iOS and Android software modules for building in-house or channel-based mobile application solutions. It also provides cloud-based vertical solutions of pre-integrated iOS and Android mobile application portfolios for healthcare, retail, media, real estate and hospitality, sports, aviation, and other sectors; and knowledge graph and data solutions which allows for real-time mobile audience targeting, reach, engagement, and monetization for 1:1 insights and interactions. The company was founded in 2009 and is headquartered in Austin, Texas.

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