Shares of j2 Global, Inc. JCOM have declined 6.3% in a month, performing worse than the industry's decrease of 2.1%.
Reasons Behind the Price Plunge
The company recently reported fourth-quarter 2017 results with lower-than-expected earnings on higher costs.
The company’s growth-by-acquisition strategy increases costs pertaining to investments, hurting its bottom-line growth in turn. This downside is likely to continue in the near future too. Notably, operating expenses in the reported quarter rose 35.4% year over year.
j2 Global’s high debt levels are another cause for worry. The company exited the quarter under review with long-term debt of $1 billion compared with $601.75 million at the end of 2016. Further, the long-term debt-to-equity ratio (expressed as a percentage) stands at 98.2%, comparing unfavorably with the industry’s 1.4% and the S&P 500 index’s 82.9%.
The negativity revolving around the stock is evident from the Zacks Consensus Estimate for current-year earnings being revised 1.5% downward in the last 30 days.
The company’s Zacks Rank #5 (Strong Sell) further substantiates the pessimism surrounding it. Also, the stock has a Momentum Score of C, highlighting its short-term unattractiveness.
Some better-ranked stocks in the broader Computer and Technology sector are AMETEK, Inc. AME, DST Systems, Inc. DST and Harris Corporation HRS. While DST Systems sports a Zacks Rank #1 (Strong Buy), AMETEK and Harris carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of AMETEK, DST Systems and Harris have rallied more than 14%, 63% and 27%, respectively, in the last six months.
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