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J2 Global (NasdaqGS:JCOM) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

J2 Global, Inc. (NasdaqGS:JCOM) is scheduled to report Q3 earnings results on November 2, 2020.

The company is expected to report earnings of $1.76/share on revenue of $338.6 million. The consensus earnings per share (EPS) of $1.76/share is based on a poll of 12 analysts and represents a growth in eps of 3.7% over the same quarter last year, when the company reported earnings of $1.70/share.

The revenue forecast of $338.6 million based on a poll of 11 analysts implies a year-over-year (YoY) decline in revenue of −1.6%. Last year the company reported $344.1 million in revenue for the quarter.

Expected to report EPS growth of 3.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $338.56 $344.14 −1.6%
EPS $1.76 $1.70 3.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters and met expectations 1 quarter.

What are your expectations from J2 Global, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.46 $1.71 17.5% Beat
Q1, 2020 $1.40 $1.40 0% Met
Q4, 2019 $2.37 $2.38 0.5% Beat
Q3, 2019 $1.68 $1.70 1.5% Beat
Q2, 2019 $1.53 $1.60 4.4% Beat
Q1, 2019 $1.33 $1.40 5.1% Beat
Q4, 2018 $2.04 $2.11 3.6% Beat
Q3, 2018 $1.51 $1.53 1.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 12.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 10, 2020 $61.37 $69.03 12.5% Increase
May 11, 2020 $81.60 $72.11 −11.6% Decline
February 10, 2020 $98.59 $95.71 −2.9% Decline
October 31, 2019 $95.26 $94.41 −0.9% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.88, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.88 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

J2 Global, Inc. is currently trading at $69.24/share, down −1.3% for the day. The company is trading at approximately 66.2% of its 52-week high of $104.57/share. The company’s stock price is up 0.3% since the last earnings report and up 0.1% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 42.73 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:JCOM Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 18.05 and a forward P/E multiple of 9.69.

J2 Global, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.61. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $69.24
P/E Ratio 18.1x
P/E Ratio (Fwd) 9.7x
PEG Ratio 0.7
Total Debt / Total Capital 32.2%
Levered Free Cash Flow $351.6 million
EV / EBITDA 7.9x

Finbox

J2 Global, Inc. is a mid-cap stock with a market capitalization of $3.296 billion and a total enterprise value of $4.262 billion. The company operates in the Information Technology sector and the Software industry.

J2 Global, Inc., together with its subsidiaries, provides Internet services worldwide. The company operates through three segments: Fax and Martech; Voice, Backup, Security, and Consumer Privacy and Protection; and Digital Media. It offers cloud services, which includes online fax services under the eFax, sFax, MyFax, eFax Plus, eFax Pro, eFax Secure, eFax Corporate, and eFax Developer brands; on-demand voice, cloud phone, and unified communications services under the eVoice, Line2, and Onebox names; online backup and disaster recovery, sync storage, veeam services, and synchronization and sharing solutions under the KeepItSafe, LiveDrive, LiveVault, OffsiteDataSync, and SugarSync names; email security, web security, and endpoint protection services under the VIPRE and Excel Micro brands; email marketing and delivery services under the Campaigner and SMTP names; virtual private network services under the IPVanish and Encrypt.me; IP licensing services; and customer support services. The company also operates a portfolio of Web properties and applications, including IGN, Mashable, PC Mag, Humble Bundle, Speedtest, Offers, Black Friday, AskMen, MedPageToday, Everyday Health, What to Expect, and others that offer technology products, gaming and lifestyle products and services, news and commentary related products, speed testing for Internet and network connections, online deals and discounts for consumers, interactive tools and mobile applications, and tools and information for healthcare professionals, as well as professional networking tools, targeted emails, and white papers for IT professionals. It serves sole proprietors, small to medium-sized businesses and enterprises, and government organizations. The company was formerly known as j2 Global Communications, Inc. and changed its name to j2 Global, Inc. in December 2011. J2 Global, Inc. was founded in 1995 and is headquartered in Los Angeles, California.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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