Web.com Group, Inc. - Momentum

Web.com Group, Inc. (WWWW) recently hit a new 52-week high after reporting an awesome 58% Q4 earnings surprise in early February. With an average earnings surprise of 38% over the last four quarters and estimates on the rise, this Zacks #1 rank stock is hosting a momentum party.

Company Description

Web.com Group, Inc. is a web site design and services company, offering a wide range of online and marketing tools to small and medium-sized businesses worldwide. The company was founded in 1999 and has a market cap of $339 million.

An online presence for small and medium-sized business is a highly effective and efficient method for gaining exposure and new customers. That trend lifted Web.com group so strong Q4 results on February 7 that came in ahead of expectations.

Fourth-Quarter Results

Revenue for the period was up 46% from last year to $38 million. Earnings also looked good at 19 cents, 58% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 38% over the last four quarters.

The company saw an up tick in one of its key performance categories, with average revenue per user (ARPU) climbing to $15.39 from $14 last quarter.

Financial Profile

Web.com Group’s earnings momentum has enabled it to strengthen its balance sheet, paying down $6 million in debt during the quarter for a total debt load of $103 million.

Estimates

We saw some pretty solid movement in estimates off the good quarter, with the current year adding 8 cents to 85 cents while the next-year estimate jumped 7 cents to $1, a solid 17% growth projection.

Valuation

But in spite of the recent gains, WWWW’s forward PE of 15X is a sharp discount to its peer average of 42X. Its PEG ratio (PE/Growth) of .88 is safely below the value benchmark of 1.

12-Month Chart

On the chart, WWWW recently hit a new 52-week high at $13.49 on the strong quarter and bullish growth projection. Look for support from the long-term trend on any weakness, take a look below.