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Bullish J2 Global Analyst Says Company's Valuation Has 'Relative Downside Protection'

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Bullish J2 Global Analyst Says Company's Valuation Has 'Relative Downside Protection'

J2 Global Inc (NASDAQ: JCOM) has a diversified business portfolio in the cloud services and digital media segments, and this brings both opportunities and challenges in today's environment, according to Wedbush.

The J2 Global Analyst

Daniel Ives maintained an Outperform rating on J2 Global with a $110 price target. 

The J2 Global Thesis

Exposure to small and medium businesses in the cloud services segment may pose challenges for J2 Global in the current landscape, as transactional volumes and spending on technology tools deteriorate, Ives said in a Tuesday note. (See his track record here.)

This segment constitutes only 10%-15% of overall exposure, while the company's marketing tech, VoIP, endpoint security and enterprise digital platform may deliver a stronger performance, the analyst said. 

J2 Global's solid free cash flow position and margin profile “provides relative downside protection on valuation,” he said. 

Referring to the potential for M&A deals, Ives said J2 Global has around $1 billion, and acquisition decisions will depend on how aggressive the company wants to get in the COVID-19 environment.

The company may be aggressive in digital media, especially related to health care and gaming, the analyst said. 

JCOM Price Action

J2 Global shares were down 2.38% at $71.47 at the time of publication Tuesday.

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Latest Ratings for JCOM

DateFirmActionFromTo
May 2020JP MorganMaintainsOverweight
May 2020WedbushMaintainsOutperform
May 2020JMP SecuritiesMaintainsMarket Outperform

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