UPDATE: Deutsche Bank Downgrades Web.com Group on Balanced Risk/Reward

Loading...
Loading...

In a report published Friday, Deutsche Bank analyst Lloyd Walmsley downgraded Web.com Group WWWW from Buy to Hold, but raised the price target from $21.00 to $27.00.

In the report, Deutsche Bank noted, “We downgrade our rating on Web.com to Hold, as we view the risk/reward as balanced following the recent run-up. Shares closed at 12.4x on EV/EBITDA and 18x on a fully-taxed P/E on 2014, which equate to a 36% premium and an 11% discount to the peer group, respectively. Our model assumes 11% nonGAAP revenue growth in 2014, on its way towards the aspiration to accelerate into low-teens, which may justify a higher multiple over time. Even assuming continued revenue growth acceleration to 13.5% in 2017 with margin expansion to 31%, our DCF analysis gets us to a $27 share price. As such, we would be more positive on the shares in the low $20s.”

Web.com Group closed on Thursday at $27.41.

Posted In: Analyst ColorDowngradesAnalyst RatingsDeutsche BankLloyd Walmsley
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...