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Why Is j2 Global (JCOM) Down 3.4% Since the Last Earnings Report?

A month has gone by since the last earnings report for j2 Global, Inc.JCOM . Shares have lost about 3.4% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

First Quarter Earnings

j2 Global's first-quarter 2017 earnings (on an adjusted basis) of $1.14 per share (including stock-based compensation expenses) missed the Zacks Consensus Estimate by 7 cents. However, earnings increased 11.76% on a year-over-year basis, on the back of higher revenues.

j2 Global's first-quarter 2017 earnings (on an adjusted basis) of $1.14 per share (including stock-based compensation expenses) missed the Zacks Consensus Estimate by 7 cents. However, earnings increased 11.76% on a year-over-year basis, on the back of higher revenues.

j2 Global's first-quarter 2017 earnings (on an adjusted basis) of $1.14 per share (including stock-based compensation expenses) missed the Zacks Consensus Estimate by 7 cents. However, earnings increased 11.76% on a year-over-year basis, on the back of higher revenues.

j2 Global's first-quarter 2017 earnings (on an adjusted basis) of $1.14 per share (including stock-based compensation expenses) missed the Zacks Consensus Estimate by 7 cents. However, earnings increased 11.76% on a year-over-year basis, on the back of higher revenues.

Quarterly revenues came in at $254.7 million, up 27.02% year over year. The top line however fell short of the Zacks Consensus Estimate of $258.5 million.

Segment-wise, total Cloud Service revenues grew 2.5% year over year to $140.4 million in the reported quarter. Digital Media revenues came in at $113.1 million, up 81.5%. IP Licensing revenues were flat at $1.2 million in the first quarter of 2017.

j2 Global's quarterly operating expenses were $165.9 million in the quarter under review, up 47% from the year-ago quarter. Quarterly adjusted EBITDA (earnings before interest and other expenses) rise 14.8% year over year to $99.5 million.

The company exited the first quarter of 2017 with approximately $187.4 million in cash and cash equivalents, compared with $123.9 million at the beginning of the quarter. Long-term debt at the end of the first quarter of 2017 was $604.3 million, compared with $601.7 million at the start of the quarter. Free cash flow at the end of the quarter increased 1.7% year over year to $61.5 million.

Guidance

The company expects earnings per share (on an adjusted basis) in the band of $5.60 to $6.00 for full-year 2017, unchanged from its previous guidance. The prediction for revenues has also been reiterated at the range of $1.13 billion to $1.17 billion.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

j2 Global, Inc. Price and Consensus

j2 Global, Inc. Price and Consensus | j2 Global, Inc. Quote

VGM Scores

At this time, j2 Global's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is suitable for value and growth investors.

Outlook

Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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