2 Internet Stocks with Tremendous Long-Term Potential

2 Internet Stocks with Tremendous Long-Term Potential

Posted On June 28, 2021 1:18 pm

The continuation of remote working arrangements even with the easing of COVID-19 pandemic restrictions and rapid tech integration in virtually all spheres as part of a fourth industrial revolution, are driving the demand for interest services.

Most companies invested in digital assets to stay operational amid the pandemic-driven economic slowdown, and educational institutions had to depend solely on online platforms for teacher-student interaction. In fact, even the trading of cars has seen much increased transactional activity on online platforms. And OpenVault Broadband Insights (OVBI) reported an increase of 51% in broadband traffic in 2020 owing primarily to remote learning and remote work.

The demand for internet services is rising significantly with several organizations redesigning their operational structures to increase their efficiencies. Thus, we thinkinternet stocks J2 Global, Inc. (JCOM – Get Rating) and CarGurus, Inc. (CARG – Get Rating) are poised to gain substantially over the long run.

J2 Global, Inc. (JCOM – Get Rating)

JCOM is a leading internet information and services company. It operates through two segments: cloud services and digital media. JCOM has a record of 25 consecutive fiscal years of revenue growth. The company is based in Los Angeles.

On June 2, JCOM announced its plan to redeem its outstanding convertible senior notes due 2029 in August. This should reduce the company’s debt and interest burden significantly.

And in April, the company announced its plan to split its operations into two independent publicly traded companies—J2 Global and Consensus—by the third quarter of 2021. This will also include a spin-off of at least 80.1% of the outstanding shares of Consensus common stock to JCOM shareholders.

JCOM’s total revenues increased 19.8% year-over-year to $398.2 million in its  fiscal first quarter, ended March 31. Its operating income grew 42.1% from its  year-ago value to $78.5 million, while its non-GAAP net income improved 43.9% year-over-year to $97.2 million. The company’s non-GAAP EPS increased 55.8% year-over-year to $2.18.

Analysts expect JCOM’s revenues to increase 24.8% year-over-year to $394.56 million in the current quarter, ending June 2021. A $2.03 consensus EPS estimate for the current  quarter indicates a 18.7% rise from the same period last year.  JCOM surpassed the Street’s EPS estimates in each of the trailing four quarters. Shares of JCOM have gained 99.5% over the past year, and 42.1% year-to-date.

It is no surprise that JCOM has an overall A rating, which equates to Strong Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

The stock also has a B grade for Growth, Value and Quality. Among the 43 stocks in the Internet – Services industry, JCOM is ranked #1.

To see additional JCOM Ratings for Sentiment, Stability and Momentum, click here.

CarGurus, Inc. (CARG – Get Rating)

CARG provides an online automotive marketplace connecting buyers and sellers of new and used cars internationally. The Cambridge, Mass. company helps shoppers find great deals from top-rated dealers. Currently, the company has more than…

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