FBR Still Long Web.com After Meeting With Management

In a report published Monday, FBR Capital Markets analyst Samad Samana maintained an Outperform rating on

, with a price target of $25. Meetings with Web.com's CEO David Brown and CFO Kevin Carney revealed that the company's execution has improved and its DIWM approach is driving DIY retention higher. "Web.com remains unique with its technology-enabled full-service DIFM approach. The biggest competitors are largely focused on helping subscribers gain a presence, whereas Web.com works with them to drive conversion and interaction as well. While others may add more services over time if the DIY segment becomes oversaturated, we believe for now Web.com should benefit from having limited competition in its target market segment," analyst Samad Samana mentioned. Churn in the DIY segment has declined mainly due to the company's "do-it-with-me" (DIWM) initiative. "Continued success with the DIWM approach should benefit ARPU and revenue growth," Samana added. Web.com's focus on acquiring high quality subscribers is expected to drive growth in the near future. In the report FBR Capital Markets noted, "While these initiatives are in the early days, they should help long-term adoption of WWWW's value-added services and ARPU growth. We believe this should also benefit Web.com's brand awareness, as it will get more exposure to SMBs, which could help lower customer acquisition costs over time as well." The company is expected to continue balancing its share repurchase and debt repayment activities. "Investors should welcome this as we believe shares remain undervalued and the company generates ample FCF to service its low-cost debt," Samana stated.