Player Avatar NetscribeTech (< 20) Submitted: 3/20/2007 9:04:31 AM : Underperform Start Price: $25.70 JCOM Score: -54.24

j2 Global Communications, Inc. (j2) provides outsourced, value-added messaging and communications services to individuals and businesses throughout the world. Their application enables its clients to receive faxes and voicemails into their e-mail accounts. It delivers many of its services leveraging its global telephony/Internet protocol (IP) network, which spans more than 2,000 cities in 26 countries across five continents.
It markets the services principally under the brand names eFax, jConnect, UniFax, Onebox, Electric Mail and eVoice.
The company’s financial performance has been robust. Its top line grew by 26% and modified earnings by 34% in fiscal 2006. The company also generated $65.8 million in free cash flow. It also managed to increase its geographical foot print from 27 to 36 countries.
The key driver for the stock would be the margin expansion brought about by price hikes continued international expansion, further penetration into the corporate channel and the ramp up of new service offerings. However one needs to closely monitor if the growth in subscriber base shrinks as a result of price increases. The litigation with Venali could also have bearing on the stock price.
j2’s valuation looks expensive. However if one takes into account the robust growth scenario, then the valuation seems reasonable. It has strong balance sheet with nearly $200 million in cash and cash equivalents and stable free cash flow. It is also offering new services to sustain its growth while at the same time taking care of its margins by corrective pricing. The company has now reported 11 consecutive years of revenue growth and 5 consecutive years of net profit growth. Thus this stock is likely to be in a bullish zone in the medium term.

Member Avatar stillwater9999 (< 20) Submitted: 11/25/2007 8:19:06 PM
Recs: 1

This looks like a Bull pitch not a Bear. ????

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