Boston Omaha Stock Forecast

Boston Omaha Stock Forecast: Boston Omaha is a “public holding company.” It’s in the business of acquisitions.

In trying to aggregate different subsidiaries, Boston Omaha wants to become a sort of corporate clearing house for certain industries, including advertising and insurance.

Specifically, Boston Omaha’s investment in insurance allows it to reinvest the “float” or premium capital that has not yet been spent for claims or other outflows.

That’s in addition to other tactical investments that will make their own marks on Boston Omaha’s balance sheet, providing clues for would-be investors to look at while they are making their decisions.

Some of the company’s proponents and some of its detractors reference a style that mirrors Berkshire Hathaway (BRK.B), where Warren Buffett expanded the corporation with insurance holdings and other acquisitions.

Some also point out that Buffett’s grandnephew Alex Buffett Rosek is in a leadership position at Boston Omaha. That may be a coincidence, but in some ways, the corporate models are similar.

For instance, the senior Buffett often refers to his largest holding, Apple (AAPL), as his “third business,” due to the enormous shareholder stake that he has in the tech giant.

In a similar way, Boston Omaha’s component firms contribute to its corporate footprint. When, for example, SEC filings show BOMN invested in a company like Dream Finder’s Homes, Inc., with attendant records on the firm’s Class A Common Stock, investors can use this as a marker of the company’s position in the real estate market, one of its “pillars” or central verticals in terms of diversification.

The same is true for more regional acquisitions like Utah Broadband, which fits neatly into Boston Omaha’s telecom category.

Are Boston Omaha Revenues Rising?

While Boston Omaha’s revenue quarterly numbers may not be rising much right now, they expanded greatly over 2018, tripling to around $11 million per quarter, and while revenues may not have gone far over that mark, the steady ongoing meeting of the same benchmark can be seen as a positive indicator of stability.

So looking at the actual quarterly increase in revenue provides a more positive picture when you go back several years. A year-over-year quarterly model provides an alternative view of profits. Then, too, analysts looking at the company’s growth model talk about its subsidiaries or “controlled businesses,” its uncontrolled private companies, and an equity portfolio that can help the firm navigate market volatility, if that is of concern to a potential investor.  

Will Boston Omaha Earnings Go Up?

Earnings-per-share is another metric that looks good for Boston Omaha.

On March 28, Boston Omaha reported earnings-per-share of 73 cents, which beat analysts’ expectations. The big news, though, was the enormous margin by which the earnings differed from projected estimates. The consensus prior to the earnings report was earnings-per-share of 5 cents. That means EPS beat estimates by around 1,400%.

It’s not unheard of for companies to wildly exceed the consensus on earnings-per-share. But this does have a positive impact on company forecasts moving forward.

Boston Omaha Stock Price Forecast?

As for a stock forecast, some of the most detailed models project that Boston Omaha stock will rise its fair value of $34 per share.

A high historical accuracy rate leads to an assessment of lower risk for this equity. Analysts point out that (at the time of writing) Boston Omaha is trading at 60 to 70% of its historic price levels, and that a steady growth rate, a good-looking ledger, and a proven track record for management has potential written all over the company.

Then there’s leadership reputation: both co-CEOs were hedge fund managers before taking the wheel. Management has also invested heavily in shares themselves, which is always a good sign.

Where outsiders look at a track record for a company, part of the confidence that is projected from the inside involves how shares are doled out, how those shares are treated over time, and how shares may factor into any compensation on any staff level.

The diversification of Boston Omaha is another major bright point on its balance sheet. While keeping some assets in cash and other stores of value, the company’s use of controlled and non-controlled businesses adds a unique dimension to its long-term strategic growth plan.

One example is Boston Omaha’s control of Link Media Outdoor with thousands of billboards that some say represents a pure play in a market where regulation and tradition make a difference. Then there’s the Airebeam company, where Boston Omaha is invested by proxy in fiber-optic cable and Wi-Fi service.

Whether these businesses can scale effectively will impact how this company does in the long run. That’s the nature of a business like this, where revenue streams and multiple innovations coalesce into a publicly traded domain offering.

Risks To Buying Boston Omaha Stock

Since Boston Omaha is an acquisitive company and not a discrete product manufacturer, investors are shielded from some kinds of risk that come with traditional product companies. They don’t have to worry about the company becoming a dinosaur in terms of product development.

There’s no threatening prospect of a competitor grabbing up market share in a particular product category, and the target company, failing to pivot, quickly becoming irrelevant.

That’s important, because for so many other publicly traded firms, the opposite is true: a company without this strategic diversification has relatively little defense against the changing winds of the market.

One of the major risks with this company, though, is that investors have to trust the leadership to make the right acquisition decisions.

A track record can come in handy, but the control placed in the hands of company managers may give some investors pause.

Also, should the company fail to pick acquisitions that promote adequate growth, its stock prices and revenues could be sharply revised.

Is Boston Omaha Stock Forecast To Rise?

Looking at a historic chart, notwithstanding an enormous spike earlier this year, Boston Omaha is on track for stable gains.

Analysts estimate that Boston Omaha could rise as high as $34 per share over based on fundamentals.

A closer look at the company’s financial statements shows its annual revenues basically doubled from 2017-2018 and again from 2018-2019. And while these growth rates have leveled off somewhat, it’s telling that BOMN revenues are forecast to forge higher again over the coming year.

All of this bolsters the common consensus that BOMN is indeed likely to gain over the next year and beyond. While a random walk down Wall Street does indeed have its share of randomness (thank you, Burton Malkiel!) there’s every reason for investors to be bullish on BOMN.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.