Financial Analysis: Benefitfocus (BNFT) & The Competition

Benefitfocus (NASDAQ: BNFT) is one of 97 publicly-traded companies in the “Enterprise Software” industry, but how does it contrast to its peers? We will compare Benefitfocus to related businesses based on the strength of its institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings for Benefitfocus and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Benefitfocus 0 2 7 0 2.78
Benefitfocus Competitors 516 2413 4060 134 2.54

Benefitfocus presently has a consensus target price of $40.00, indicating a potential upside of 27.80%. As a group, “Enterprise Software” companies have a potential upside of 7.20%. Given Benefitfocus’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Benefitfocus is more favorable than its peers.

Volatility and Risk

Benefitfocus has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Benefitfocus’ peers have a beta of 1.13, indicating that their average stock price is 13% more volatile than the S&P 500.

Profitability

This table compares Benefitfocus and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Benefitfocus -11.24% N/A -16.22%
Benefitfocus Competitors -24.56% -412.83% -8.08%

Earnings & Valuation

This table compares Benefitfocus and its peers top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Benefitfocus $248.19 million -$6.36 million -34.02
Benefitfocus Competitors $1.27 billion $344.85 million 34.80

Benefitfocus’ peers have higher revenue and earnings than Benefitfocus. Benefitfocus is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Insider & Institutional Ownership

84.6% of Benefitfocus shares are held by institutional investors. Comparatively, 59.8% of shares of all “Enterprise Software” companies are held by institutional investors. 40.1% of Benefitfocus shares are held by company insiders. Comparatively, 23.6% of shares of all “Enterprise Software” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Benefitfocus beats its peers on 8 of the 12 factors compared.

About Benefitfocus

Benefitfocus, Inc. (Benefitfocus) is a provider of cloud-based benefits management platform for consumers, employers, insurance carriers and brokers. The Benefitfocus Platform allows how organizations and individuals shop for, enroll in, manage and exchange benefits. The Company operates through two business segments: Employer, which derives its revenue from customers that use the Company’s services for the provision of benefits to their employees, and administrators acting on behalf of employers, Carrier, which derives its revenue from insurance companies that provide coverage at their own risk. Its solutions support benefits plans, including healthcare, dental, life and disability insurance, and voluntary benefits plans, such as critical illness, supplemental income and wellness programs. It provides a multi-tenant cloud-based benefits management platform to the employer and carrier markets.

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