JCOM Strategic Valuation - Presentation
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JCOM Strategic Valuation - Presentation
- 1. Ticker: JCOM Strategic Valuation Alessandro Masi, MBA © A.Masi,2011 Boston, July 20 2011
- 2. Cloud-based, value-added communication, messaging and data backup services + © A.Masi,2011
- 3. CurrentEV/IC' Forward ROI‘ 0.0 5.0 10.0 15.0 20.0 25.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 55.0 60.0 65.0 70.0 JCOM ACOMEGOV OPEN DMD IL LOOP GOOG WBMD AOL RAX DRIV Shorts Long © A.Masi,2011
- 4. Concerns over the eFax business (currently 70% of revenues) Concerns about management Concerns about the use of cash © A.Masi,2011
- 5. 0% 50% 100% 2009 2010 2011E 85 70 55 eFax eVoice FuseMail Campaigner Keep It Safe One Box (Premium) Data Haven Buzz Networks 181.0 220.7 241.5 245.6 255.3 320.0 53.1 68.4 72.5 66.8 83.1 111.3 - 50.0 100.0 150.0 200.0 250.0 300.0 350.0 2006 2007 2008 2009 2010 2011E Expected Net Income increase of 25% to 33% in 2011 Portfolio of cloud-based services expanding internationally © A.Masi,2011 Revenues Revenues Net Income
- 6. Up from $21.32 in Sep 2010 Peak at $30.64 in Dec 2010 Too low at $27… © A.Masi,2011 Consolidation?
- 7. 13% 41% 46% 37% 47% 70% 68% 69% 71% 89% 102% 102% 98% 94% 93% 0% 500% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 LFY+1 LFY+2 LFY+3 LFY+4 LFY+5 ROI' 13% 41% 46% 37% 47% 70% 68% 69% 71% 89% 102% 102% 74% 0% 500% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 LFY+1 LFY+2 Mkt Imp ROI' 17.8 18 18.2 18.4 18.6 18.8 19 19.2 19.4 19.6 19.8 20 20.2 20.4 89 90 91 92 93 94 95 96 97 98 99 100 101 102 37% 38% 40% 42% 43% 45% 46% 48% 49% 51% 52% 54% 55% 57% 2,223 2,248 2,273 2,298 2,323 2,348 2,373 2,398 2,423 2,448 2,473 2,498 2,523 2,548 48.12 48.67 49.23 49.78 50.34 50.89 51.45 52.00 52.56 53.11 53.67 54.22 54.78 55.33 EV/IC exp ROI Change EV exp Stock price exp Price Range: $48.12-$55.32 © A.Masi,2011
- 8. Q2 2011 results will beat expectations again IC‘ will grow by 13% in 2011 Synergies from acquisitions Attractive target for takeovers © A.Masi,2011
- 9. CurrentEV/IC' Forward ROI‘ 0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5 25.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 55.0 60.0 65.0 70.0 JCOM ACOMEGOV OPEN DMD IL LOOP GOOG WBMD AOL RAX DRIV Δ EV/IC'=4.8 to 7.4 © A.Masi,2011
- 10. Undervalued Growing sector, growing business Huge cash flows Will beat expectations again © A.Masi,2011
Notes de l'éditeur
- Data Haven (data storage and backup) and Buzz Networks (affiliation network) acquisitions completed in 2011
- JCOM is the only undervalued company in the Internet Software and Services
- Market thinks JCOM is mismanaged: renting assets, growing through acquisitions only, also didn’t like the share buyback program (2M shares by 2012)
- Increasing demand in cloud-based services AND Expanding portfolio of services through acquisitions, patents licensing, R&D Expanding internationally: now present in 4500 cities in 49 countries Cancellation rate down from 3.7% to 2.6% in Q1 2011
- Market recognizes undervaluation in September 2010, then it raises concerns, but the price bounces back four times from around 27$ to a plateau ranging from 27$ to $30.64
- ROI from 89% to 102%, EV/IC from 17.8 to 20.4, price from $48.12 to $55.32
- EV/IC‘ target ranges from 17.8 to 20.4