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How will J2 Global (JCOM) Stock React To Its 2014 First Quarter Earnings Results?

Stocks in this article: JCOM

NEW YORK (TheStreet) -- After the market closed on Thursday, J2 Global Inc. (JCOM) reported revenue for the most recent quarter was up 18% to $134.1 million, versus $113.6 million for the 2013 first quarter.

Quarterly EBITDA was higher by 18.9% to $57.3 million, compared to $48.2 million for the year ago quarter.

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The company, which provides services delivered through the Internet, said earnings per diluted share grew 22.4% to 60 cents, from 49 cents for the same period last year.

J2 Global saw a 13.4% increase in adjusted non-GAAP earnings per diluted share to 76 cents, from 67 cents for the same quarter the previous year.

The company reaffirmed its previous guidance for the 2014 fiscal year of revenue between $580-$600 million and adjusted non GAAP earnings per share between $3.23-$3.47.

TheStreet Ratings team rates J2 GLOBAL INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate J2 GLOBAL INC (JCOM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 20.6%. Since the same quarter one year prior, revenues rose by 35.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $58.44 million or 25.97% when compared to the same quarter last year. In addition, J2 GLOBAL INC has also modestly surpassed the industry average cash flow growth rate of 22.53%.
  • The gross profit margin for J2 GLOBAL INC is currently very high, coming in at 85.94%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.03% trails the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.35, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.18 is very high and demonstrates very strong liquidity.
  • You can view the full analysis from the report here: JCOM Ratings Report
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