David Hernandez wrote a piece on Seeking Alpha that Google entering the domain business may not be as bad as thought for competitor Web.com. Web.com owns Register.com and Network Solutions. The stock is down 37.7 % year to date.
Here is the summary of the article:
- Web.com’s stock has declined 36.4% year to date. The decline is being driven by lower revenue guidance and Google announcing their entrance into the domain industry.
- Google will have an impact on the domain industry but the impact won’t be as significant as investors are anticipating. Additionally, Web.com may actually benefit from Google’s presents.
- Even if Google doesn’t help Web.com, Web.com has been able to perform well in a very competitive market environment.
- Over the last few years, the company’s revenue has grow double digits, profitability has significantly improved, and the balance sheet is stronger.
- Investors are overreacting to the Google announcement and have driven Web.com’s stock into undervalued territory. This combined with the company’s future growth prospects make the stock a great value.
Read the full article on Seeking Alpha