Given that Blucora (BCOR) has increased 24%+ since we mentioned it in late Jan. (nearly 3x that of the S&P 500), is now within only 1% of our valuation, and that we are nearly half-way through 2013, we are introducing our 2014 estimates, along with the new price target of $21.25/sh. Our new valuation represents a sum-of-parts: 6x search adj. EBITDA, 8x tax services EBITDA, and $148.7MM in net cash.
We have not adjusted our 2013 estimates: search revenues of $387.9MM; search adj. EBITDA of $58.2MM; tax services revenues and adj. EBITDA of $97.6MM and $48.8MM, respectively.
For 2014, we expect continuing double-digit top-line growth within the search segment; 15.1%, compared with our conservative 2013 projection of 12.5%. Although overall online search revenue growth is expected to slow down a bit in 2014, we expect BCOR's adjustments to Google's (GOOG) latest pricing policies to be completed by Q3 of 2013, from which the benefits will be seen in 2014 revenue growth. While such transition will be successful, we see BCOR also focusing on pushing the O&O share of search revenues a bit higher. With all this said, we expect EBITDA margin to remain flat at 15% compared with our 2013 projection, which, again, we believe to be conservative. We look for 2014 search revenues and adj. EBITDA of $446.5MM and $67.0MM, respectively.
Regarding BCOR's tax services segment, we expect nearly an 8% revenue growth in 2014, driven mainly by a higher NFP estimate for 2013, which means likely more tax payers in 2014 tax season. We estimate an average of 200K change in NFP per month in 2013. In addition, we think 2014 TaxAct's total units, as a percentage of 2013 NFP will go up a few bps to approx. 4%. This translates into approx. 5.5MM total units during 2014 tax season, generating around $94.6MM in revenues. For Q3 and Q4 '14, we expect additional $3.0MM in revenues, bringing 2014 total tax services revenues to $97.6MM. In addition, we think BCOR's marketing, development, and partnership strategies will pay off more next year, possibly increasing this segment's EBITDA margin to 50%, which equates to $48.8MM in EBITDA, 11% growth from the prior year.
Again, our sum-of-parts valuation based on 2014 numbers, results in $21.25/sh; 13% upside from where BCOR closed at on Friday (5/10). Lastly, BCOR management will be presenting at JMP Securities Research conference in San Francisco on Monday (5/13).
We have not adjusted our 2013 estimates: search revenues of $387.9MM; search adj. EBITDA of $58.2MM; tax services revenues and adj. EBITDA of $97.6MM and $48.8MM, respectively.
For 2014, we expect continuing double-digit top-line growth within the search segment; 15.1%, compared with our conservative 2013 projection of 12.5%. Although overall online search revenue growth is expected to slow down a bit in 2014, we expect BCOR's adjustments to Google's (GOOG) latest pricing policies to be completed by Q3 of 2013, from which the benefits will be seen in 2014 revenue growth. While such transition will be successful, we see BCOR also focusing on pushing the O&O share of search revenues a bit higher. With all this said, we expect EBITDA margin to remain flat at 15% compared with our 2013 projection, which, again, we believe to be conservative. We look for 2014 search revenues and adj. EBITDA of $446.5MM and $67.0MM, respectively.
Regarding BCOR's tax services segment, we expect nearly an 8% revenue growth in 2014, driven mainly by a higher NFP estimate for 2013, which means likely more tax payers in 2014 tax season. We estimate an average of 200K change in NFP per month in 2013. In addition, we think 2014 TaxAct's total units, as a percentage of 2013 NFP will go up a few bps to approx. 4%. This translates into approx. 5.5MM total units during 2014 tax season, generating around $94.6MM in revenues. For Q3 and Q4 '14, we expect additional $3.0MM in revenues, bringing 2014 total tax services revenues to $97.6MM. In addition, we think BCOR's marketing, development, and partnership strategies will pay off more next year, possibly increasing this segment's EBITDA margin to 50%, which equates to $48.8MM in EBITDA, 11% growth from the prior year.
Again, our sum-of-parts valuation based on 2014 numbers, results in $21.25/sh; 13% upside from where BCOR closed at on Friday (5/10). Lastly, BCOR management will be presenting at JMP Securities Research conference in San Francisco on Monday (5/13).
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