WebMD Health Corp. - Momentum

WebMD Health Corp. (WBMD) recently spiked to a new multi-year high on the heels of strong Q4 results that included a 9% earnings surprise. With an average earnings surprise of 17% over the last four quarters and bullish growth projection, this Zacks #1 rank stock offers a health dose of momentum.

Company Description

WebMD Health Corp. provides health information services to consumers and healthcare professional through public and private portals primarily in the United States and has a market cap of $3.3 billion.

Although WBMD has been trending higher for the last two years in the global economic recovery, shares got an extra boost in late February when the company reported strong Q4 results that came in ahead of expectations.

Fourth-Quarter Results

Revenue for the period was up 22% from last year to $169 million. Earnings also looked good, coming in at 47 cents, 9% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 17% over the last four quarters.

The driver of the good quarter was advertising and sponsorship revenue, which increased 28% from last year to $147 million. Web traffic was also on the upswing climbing 38% from last year to 86 million unique users per month.

Financial Profile

WebMD also benefits from a strong financial profile, with cash and equivalents of $400 million and no debt, down from $492 million just last year.

Estimates

The analysts liked what they saw during the quarter, with the current year adding 10 cents to $1.32. The next-year estimate is bullish, pegged at $1.60, a 21% growth projection.

Valuation

In light of the solid gains, the valuation picture does a look a bit pricey, with its forward P/E of 42X a sharp premium to its peer average of 14X.

2-Year Chart

On the chart, WBMD spike to a new multi-year high on the good quarter before pulling back a bit on general market volatility. Look for support from the long-term trend on any weakness, take a look below.