Web.com Has The 'Best Risk/Reward In The Space' And Deutsche Bank Is Upgrading

In a report published Monday, analysts at Deutsche Bank upgraded

from Hold to Buy. The price target was raised from $18 to $28. The analysts believe that the company offers the best risk/reward profile in the website presence and tool provider domain. Web.com offers an attractive investment opportunity, given that it is trading at a steep discount to its peers. The stock is still 40 percent below the peak seen in 2014. The company is, however, expected to deliver stable sequential growth in 2015. "Consistent performance should restore confidence, allow for upward revisions to estimates and multiple expansion – we view this backdrop as very favorable," the analysts said. Web.com's new DIWM offering has been showing "promising results in the early stages" and driving a reduction in churn in the SIY website builder division. In addition, the analysts believe that the company has done well over the past three years to reduce its debt using free cash flow. The company now has the capacity to use capital worth about $225 million for potential acquisitions and general incremental EBITDA growth. "Web.com has executed very well over its decade as a public company, but stumbled of late, missing its EBITDA and FCF expectations one year after the acquisition of Network Solutions by 4 percent and 12 percent," according to Deutsche Bank.