Tuesday, May 22, 2012

J2 Global Communications - All VoIP News

J2 Global Communications is a ~$1.1B market cap company that provides cloud-based communication services to business clients. The company helps corporations digitize various business communications and deliver on-line service infrastructure to reduce corporate capital spending.

In my opinion, JCOM stock is undervalued and represents a great buying possibility in a value investment that offers the popular cloud computing theme. In this article, I will run you through the firm's historical financial performance and my DCF valuation, as then as provide you the recent corporate development to support my view on the stock.

Comments: JCOM has experienced healthy revenue growth since 2007. The firm is very profitable as reflected by its ~80% gross profit margin and ~40% operating income margin. It is as well a cash generator as free cash flow margin has grown steadily from ~35% in 2007 to ~42% in 2011. Stable ROE trend reaffirms the company's high profitability and the current ratio metric suggests JCOM is financially safe in terms of liquidity.

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