July 16, 2017

NASDAQ: JCOM

J2 GLOBAL INC
BUY HOLD SELL

BUY
RATING SINCE 07/13/2010
A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F TARGET PRICE $110.87

Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$1.46 1.72% 0.94 $4.1 Billion $62.55-$91.48 $84.47

Sector: Technology Sub-Industry: Internet Software & Services Source: S&P

Weekly Price: (US$) SMA (50) SMA (100) 1 Year 2 Years
JCOM BUSINESS DESCRIPTION
j2 Global, Inc., together with its subsidiaries, 120
engages in the provision of Internet services
TARGET
TARGET PRICE
TARGETPRICE
TARGET $110.87
PRICE$110.87
PRICE $110.87
$110.87
110
worldwide. It operates through two segments,
Business Cloud Services and Digital Media. 100

STOCK PERFORMANCE (%) 90

3 Mo. 1 Yr. 3 Yr (Ann)
Price Change 3.58 28.04 19.46 80

GROWTH (%) 70
Last Qtr 12 Mo. 3 Yr CAGR
60
Revenues 27.01 22.15 20.64
Net Income -13.77 4.66 9.37 50
EPS -14.76 4.82 8.20 Rating History
BUY
RETURN ON EQUITY (%)
Volume in Millions
JCOM Ind Avg S&P 500 20
Q1 2017 15.94 14.33 13.16
Q1 2016 15.60 14.52 11.83 10
Q1 2015 14.53 12.93 13.71
0
2015 2016 2017
P/E COMPARISON COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History

RECOMMENDATION
We rate J2 GLOBAL INC (JCOM) a BUY. This is driven by a number of strengths, which we believe should
have a greater impact than any weaknesses, and should give investors a better performance opportunity than
most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue
growth, solid stock price performance, notable return on equity, reasonable valuation levels and expanding
profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net
income.
27.79 40.15 24.41
JCOM Ind Avg S&P 500 HIGHLIGHTS
JCOM's revenue growth has slightly outpaced the industry average of 21.1%. Since the same quarter one
year prior, revenues rose by 27.0%. This growth in revenue does not appear to have trickled down to the
EPS ANALYSIS¹ ($) company's bottom line, displayed by a decline in earnings per share.

Compared to its closing price of one year ago, JCOM's share price has jumped by 28.04%, exceeding the
performance of the broader market during that same time frame. Regarding the stock's future course,
although almost any stock can fall in a broad market decline, JCOM should continue to move higher despite
the fact that it has already enjoyed a very nice gain in the past year.

The return on equity has improved slightly when compared to the same quarter one year prior. This can be
Q1 0.45
Q2 0.80
Q3 0.77
Q4 0.72

Q1 0.61
Q2 0.69
Q3 0.94
Q4 0.89

Q1 0.52

construed as a modest strength in the organization. Compared to other companies in the Internet Software &
Services industry and the overall market, J2 GLOBAL INC's return on equity exceeds that of both the industry
2015 2016 2017 average and the S&P 500.
NA = not available NM = not meaningful
The gross profit margin for J2 GLOBAL INC is currently very high, coming in at 87.38%. It has increased from
1 Compustat fiscal year convention is used for all fundamental
data items. the same quarter the previous year. Despite the strong results of the gross profit margin, JCOM's net profit
margin of 10.13% significantly trails the industry average.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 1
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: JCOM

J2 GLOBAL INC
Sector: Technology Internet Software & Services Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$1.46 1.72% 0.94 $4.1 Billion $62.55-$91.48 $84.47

PEER GROUP ANALYSIS INDUSTRY ANALYSIS

REVENUE GROWTH AND EBITDA MARGIN*
The US internet software and services industry includes companies that develop and market internet
software and provide services such as online databases, interactive services, web address registration,
400%

MOMO
database construction, and website design. The industry is highly competitive and characterized by rapid
FA

technological changes, evolving industry standards, and frequent new product and service developments.
VO

The industry includes about 4,000 companies, with combined annual revenue of approximately $30 billion.
RA
BL

Alphabet (GOOG), eBay (EBAY), and Yahoo (YHOO) are major players.
E

Over the past decade, consumers have embraced the online channel to purchase goods and services. The
number of worldwide consumers becoming more comfortable in using the internet to purchase goods or
services is expected to continue to grow. Increasing online availability of services and declines in broadband
Revenue Growth (TTM)

tariffs and associated hardware prices will continue to drive robust growth.

There is an on-going trend toward industry consolidation as leading companies seek access to new
UN
FA

technology and customer bases developed by recent start-ups in order to increase market share. Recent
VO

acquisitions by large and well-capitalized technology companies have altered the competitive landscape.
RA

CRTO LOGM ATHM

B
0%

Profitability of individual companies depends largely on volume and efficient operations and small companies
LE

YELP CMPR GRUB JCOM40%

0% GDDY compete by serving niche segments or by providing technical expertise.
EBITDA Margin (TTM)
Companies with higher EBITDA margins and The industry is highly competitive, particularly in the advertising segment. This competition has intensified as
revenue growth rates are outperforming companies a result of consolidation and low entry barriers, which has caused price reductions for advertising space,
with lower EBITDA margins and revenue growth implying a drop in margins. Another challenge facing the industry is related to secure transmission of
rates. Companies for this scatter plot have a market personal information over public networks. These networks are vulnerable to unauthorized access by
capitalization between $2.5 Billion and $6.6 Billion. hackers and computer viruses. Allowing unauthorized access to users’ information subjects a company to
Companies with NA or NM values do not appear. reputational, financial, and legal risks.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization. Looking forward, companies’ success will depend on their ability to adopt rapidly evolving technologies, alter
services to meet industry standards, and improve the performance and reliability of services. Investment in
REVENUE GROWTH AND EARNINGS YIELD research and development will continue to be an integral part of company and industry success.
400%

MOMO
PEER GROUP: Internet Software & Services
FA

Recent Market Price/ Net Sales Net Income

VO
RA

Ticker Company Name Price ($) Cap ($M) Earnings TTM ($M) TTM ($M)
BL
E

JCOM J2 GLOBAL INC 84.47 4,071 27.79 928.42 148.32

SINA SINA CORP 92.63 6,616 28.24 1,110.33 248.29
MOMO MOMO INC -ADR 40.76 6,286 37.74 767.41 219.41
WUBA 58.COM INC -ADR 49.75 5,993 NM 1,151.08 -33.83
Revenue Growth (TTM)

LOGM LOGMEIN INC 110.45 5,812 NM 443.79 -14.85

ATHM AUTOHOME INC -ADR 46.97 5,416 29.17 884.96 186.48
UN

GRUB GRUBHUB INC 45.91 3,958 69.56 537.23 57.34

FA
VO

LOGM ATHM GDDY GODADDY INC 42.35 3,890 NM 1,903.90 -5.40

RA
B

GRUB CRTO
0%

CRTO CRITEO SA 50.73 3,090 42.99 1,914.56 77.58

LE

WUBAYELP SINA
CMPRGDDY
-1% JCOM 4% CMPR CIMPRESS NV 94.84 2,954 NM 2,050.35 -20.08
Earnings Yield (TTM) YELP YELP INC 31.49 2,538 449.86 751.78 6.00
Companies that exhibit both a high earnings yield The peer group comparison is based on Major Internet Software & Services companies of comparable size.
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between 14.4% and
383.9%. Companies with NA or NM values do not
appear.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 2
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: JCOM

J2 GLOBAL INC
Sector: Technology Internet Software & Services Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$1.46 1.72% 0.94 $4.1 Billion $62.55-$91.48 $84.47

COMPANY DESCRIPTION STOCK-AT-A-GLANCE

j2 Global, Inc., together with its subsidiaries, engages in Below is a summary of the major fundamental and technical factors we consider when determining our
the provision of Internet services worldwide. It operates overall recommendation of JCOM shares. It is provided in order to give you a deeper understanding of our
through two segments, Business Cloud Services and rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
Digital Media. The Business Cloud Services segment important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
offers cloud services to sole proprietors, small to understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
medium-sized businesses and enterprises, and valuation. Please refer to our Valuation section on page 5 for further information.
government organizations. This segment provides online
fax services under the eFax, MyFax, eFax Plus, eFax Pro, FACTOR SCORE
eFax Secure, eFax Corporate, and eFax Developer names;
on-demand voice and unified communications services Growth out of 5 stars 4.5
under the eVoice and Onebox names; online backup and Measures the growth of both the company's income statement and weak strong
disaster recovery solutions under the KeepItSafe, cash flow. On this factor, JCOM has a growth score better than 80% of
LiveDrive, LiveVault, and SugarSync names; hosted email the stocks we rate.
security, email encryption, and email filtering and
archival services under the FuseMail name; email
marketing services under the Campaigner name; and
Total Return out of 5 stars 4.0
cloud-based customer relationship management Measures the historical price movement of the stock. The stock weak strong
solutions under the CampaignerCRM name. The Digital performance of this company has beaten 70% of the companies we
Media segment operates a portfolio of Web properties, cover.
including PCMag.com, IGN.com, Speedtest.net,
AskMen.com, TechBargains.com, Offers.com, and Efficiency out of 5 stars 4.5
Everydayhealth.com that offer technology products, Measures the strength and historic growth of a company's return on weak strong
gaming and lifestyle products and services, news and invested capital. The company has generated more income per dollar of
commentary related products, speed testing for Internet capital than 80% of the companies we review.
and network connections, and online deals and discounts
for consumers, as well as professional networking tools,
targeted emails, and white papers for IT professionals.
Price volatility out of 5 stars 4.0
This segment also sells display and video advertising Measures the volatility of the company's stock price historically. The weak strong
solutions, as well as targets advertising across the stock is less volatile than 70% of the stocks we monitor.
Internet; sells business-to-business leads for IT vendors;
promotes deals and discounts on its Web properties for Solvency out of 5 stars 4.0
consumers; and licenses the right to use PCMag's Measures the solvency of the company based on several ratios. The weak strong
Editors' Choice logo and other copyrighted editorial company is more solvent than 70% of the companies we analyze.
content to businesses. The company was formerly known
as j2 Global Communications, Inc. and changed its name Income out of 5 stars 3.5
to j2 Global, Inc. in December 2011. j2 Global, Inc. was
Measures dividend yield and payouts to shareholders. The company's weak strong
founded in 1995 and is headquartered in Los Angeles,
dividend is higher than 60% of the companies we track.
California.

J2 GLOBAL INC THESTREET RATINGS RESEARCH METHODOLOGY

6922 Hollywood Boulevard, Suite 500
Los Angeles, CA 90028 TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
USA price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
Phone: 323-860-9200 perform against a general benchmark of the equities market and interest rates. While our model is
http://www.j2global.com quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.

Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 3
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: JCOM

J2 GLOBAL INC
Sector: Technology Internet Software & Services Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$1.46 1.72% 0.94 $4.1 Billion $62.55-$91.48 $84.47

Consensus EPS Estimates² ($) FINANCIAL ANALYSIS

IBES consensus estimates are provided by Thomson Financial
J2 GLOBAL INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when
compared to the same period a year ago. Even though sales increased, the net income has decreased. J2
GLOBAL INC has weak liquidity. Currently, the Quick Ratio is 0.75 which shows a lack of ability to cover
short-term cash needs. The company's liquidity has decreased from the same period last year, indicating
deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by
2.46% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in
1.36 5.83 E 6.55 E a position in which financial difficulties could develop in the future.
Q2 FY17 2017(E) 2018(E)
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
INCOME STATEMENT
Q1 FY17 Q1 FY16
Net Sales ($mil) 254.67 200.50
EBITDA ($mil) 95.91 81.51
EBIT ($mil) 56.59 54.34
Net Income ($mil) 25.82 29.94

BALANCE SHEET
Q1 FY17 Q1 FY16
Cash & Equiv. ($mil) 187.47 312.58
Total Assets ($mil) 2,102.55 1,771.83
Total Debt ($mil) 828.43 594.74
Equity ($mil) 930.43 908.04

PROFITABILITY
Q1 FY17 Q1 FY16
Gross Profit Margin 87.38% 85.95%
EBITDA Margin 37.66% 40.65%
Operating Margin 22.22% 27.10%
Sales Turnover 0.44 0.43
Return on Assets 7.05% 7.99%
Return on Equity 15.94% 15.60%

DEBT
Q1 FY17 Q1 FY16
Current Ratio 0.80 2.57
Debt/Capital 0.47 0.40
Interest Expense 12.41 10.23
Interest Coverage 4.56 5.31

SHARE DATA
Q1 FY17 Q1 FY16
Shares outstanding (mil) 47 48
Div / share 0.37 0.33
EPS 0.52 0.61
Book value / share 19.59 18.91
Institutional Own % NA NA
Avg Daily Volume 364,400 370,492
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 4
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: JCOM

J2 GLOBAL INC
Sector: Technology Internet Software & Services Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$1.46 1.72% 0.94 $4.1 Billion $62.55-$91.48 $84.47

RATINGS HISTORY VALUATION

Our rating for J2 GLOBAL INC has not changed BUY. This stock's P/E ratio indicates a significant discount compared to an average of 40.15 for the Internet
since 4/23/2009. As of 7/13/2017, the stock was Software & Services industry and a premium compared to the S&P 500 average of 24.41. Conducting a second
trading at a price of $84.47 which is 7.7% below its comparison, its price-to-book ratio of 4.31 indicates a premium versus the S&P 500 average of 3.04 and a
52-week high of $91.48 and 35.0% above its 52-week significant discount versus the industry average of 6.40. The price-to-sales ratio is well above the S&P 500
low of $62.55. average, but well below the industry average. Upon assessment of these and other key valuation criteria, J2
GLOBAL INC proves to trade at a discount to investment alternatives within the industry.
2 Year Chart
$100
BUY: $67.52

Price/Earnings 1 2 3 4 5 Price/CashFlow 1 2 3 4 5
premium discount premium discount
JCOM 27.79 Peers 40.15 JCOM 14.86 Peers 26.59
$75 • Discount. A lower P/E ratio than its peers can • Discount. The P/CF ratio, a stock’s price divided by
signify a less expensive stock or lower growth the company's cash flow from operations, is useful
expectations. for comparing companies with different capital
• JCOM is trading at a significant discount to its requirements or financing structures.
2015 2016 peers. • JCOM is trading at a significant discount to its
peers.

MOST RECENT RATINGS CHANGES

Price/Projected Earnings 1 2 3 4 5 Price to Earnings/Growth 1 2 3 4 5
premium discount premium discount
Date Price Action From To JCOM 12.90 Peers 19.51 JCOM 0.32 Peers 0.38
7/13/15 $67.52 No Change Buy Buy • Discount. A lower price-to-projected earnings ratio • Discount. The PEG ratio is the stock’s P/E divided
Price reflects the closing price as of the date listed, if available than its peers can signify a less expensive stock or by the consensus estimate of long-term earnings
lower future growth expectations. growth. Faster growth can justify higher price
• JCOM is trading at a significant discount to its multiples.
RATINGS DEFINITIONS &
peers. • JCOM trades at a discount to its peers.
DISTRIBUTION OF THESTREET RATINGS
(as of 7/13/2017) Price/Book 1 2 3 4 5 Earnings Growth 1 2 3 4 5
premium discount lower higher
43.81% Buy - We believe that this stock has the JCOM 4.31 Peers 6.40 JCOM 4.82 Peers 39.78
opportunity to appreciate and produce a total return of • Discount. A lower price-to-book ratio makes a • Lower. Elevated earnings growth rates can lead to
more than 10% over the next 12 months. stock more attractive to investors seeking stocks capital appreciation and justify higher
with lower market values per dollar of equity on the price-to-earnings ratios.
30.69% Hold - We do not believe this stock offers balance sheet. • However, JCOM is expected to significantly trail its
conclusive evidence to warrant the purchase or sale of • JCOM is trading at a significant discount to its peers on the basis of its earnings growth rate.
shares at this time and that its likelihood of positive total peers.
return is roughly in balance with the risk of loss.
Price/Sales 1 2 3 4 5 Sales Growth 1 2 3 4 5
25.50% Sell - We believe that this stock is likely to premium discount lower higher
decline by more than 10% over the next 12 months, with JCOM 4.32 Peers 10.41 JCOM 22.15 Peers 31.75
the risk involved too great to compensate for any • Discount. In the absence of P/E and P/B multiples, • Lower. A sales growth rate that trails the industry
possible returns. the price-to-sales ratio can display the value implies that a company is losing market share.
investors are placing on each dollar of sales. • JCOM significantly trails its peers on the basis of
• JCOM is trading at a significant discount to its sales growth
TheStreet Ratings industry on this measurement.
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This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 5
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.