Critical Survey: Benefitfocus (BNFT) & The Competition

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

Insider and Institutional Ownership

84.6% of Benefitfocus shares are owned by institutional investors. Comparatively, 59.2% of shares of all “Enterprise Software” companies are owned by institutional investors. 40.1% of Benefitfocus shares are owned by company insiders. Comparatively, 23.4% of shares of all “Enterprise Software” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Benefitfocus has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500. Comparatively, Benefitfocus’ rivals have a beta of 1.13, meaning that their average stock price is 13% more volatile than the S&P 500.

Profitability

This table compares Benefitfocus and its rivals’ 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 -25.34% -211.44% -8.21%

Earnings & Valuation

This table compares Benefitfocus and its rivals revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Benefitfocus $248.19 million -$6.36 million -33.59
Benefitfocus Competitors $1.27 billion $348.15 million 37.17

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

Analyst Ratings

This is a summary of recent recommendations for Benefitfocus and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Benefitfocus 0 2 7 0 2.78
Benefitfocus Competitors 343 2044 3882 107 2.59

Benefitfocus presently has a consensus target price of $40.00, indicating a potential upside of 29.45%. As a group, “Enterprise Software” companies have a potential upside of 2.58%. Given Benefitfocus’ stronger consensus rating and higher possible upside, research analysts clearly believe Benefitfocus is more favorable than its rivals.

Summary

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

Benefitfocus Company Profile

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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