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Fundamental Analysis: j2 Global, Inc. (NASDAQ:JCOM)
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j2 Global, Inc. (NASDAQ:JCOM) [Trend Analysis] shares recently had a big jump in mid february as they reported earnings and hiked their dividend, while analysts believe M&A activities will be a major catalyst for the stock. For those who rely on fundamentals, how does the pricing of this stock look from a growth and value pricing angle?
j2 Global, Inc. (NASDAQ:JCOM) last traded at $67.91 after moving up 0.74% for the trading day.
JCOM is trading with a trailing 12 month P/E multiple of 25.82 and an estimated forward P/E multiple of 15.60. The stock has an estimated 5 year annual growth of 15.01% and a PEG multiple of 1.72.
From a value investor perspective, as mentioned j2 Global, Inc. trades on an estimated forward P/E multiple of 15.60. The current estimated forward P/E ratio for the market as a whole is approximately 19.82. Therefore, for value investors JCOM appears to be underpriced.
For growth investors, who are more interested in growth into the longer term for the stock, we look at the PEG multiple (P/E to growth) of j2 Global, Inc. (NASDAQ:JCOM). This PEG multiple takes into account the expected long term growth in earnings of j2 Global, Inc. rather than merely the growth for one full earnings period ahead.
As a rule of thumb, growth investors often believe a stock with a PEG of between 0 and 1 is considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of JCOM being 1.72, we consider j2 Global, Inc. to likely be priced at fair value.
The mean analyst 12 month target price for j2 Global, Inc. (NASDAQ:JCOM) is currently $71.00 or 4.55% above the current price. Additionally, the stock has been as high as $68.20 and as low as $43.58 in the last 52 weeks. Analysts are estimating that JCOM will report earnings per share of $0.94 next quarter.