Web.com (WEB) to Report Q3 Earnings: What’s in the Cards?

Web.com Group Inc. WEB is scheduled to release third-quarter 2017 results on Nov 7. The company has delivered an average positive earnings surprise of 7.96% in the trailing four quarters.

Moreover, the online marketing services provider posted adjusted revenues of $188.1 million in second-quarter 2017 compared with $193.9 million in the year-ago period.

For third-quarter 2017, Web.com projects non-GAAP revenues to be in the range of $187–$190 million.

Notably, Web.com has gained 18.8% year to date, slightly underperforming the 21.6% rally of the industry it belongs to.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Web.com’s top line is expected to be driven by Web Brand Networks. The company is doing well in the vertical market. Its focus on real estate and dental markets is a positive.

We believe the company’s TORCHx and Lighthouse 360 solutions will enable it to bring in more customers and therefore drive growth.

Notably, Web.com has been undertaking strategic acquisitions to boost its operations. The company’s acquisition of Donweb.com last year and Scoot in 2014 will continue to accelerate overseas expansion in our view.

However, decline in overall retail business and decreasing net new subscribers are headwinds. Also, an increasingly competitive business environment remains a concern.

Earnings Whispers

Our proven model does not conclusively show that Web.com is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:

Zacks ESP: Web.com’s Earnings ESP is +0.28%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Web.com carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some stocks which, as per our model, have the right combination of elements to post an earnings beat this quarter:

Adobe Systems Inc. ADBE has an Earnings ESP of +0.25% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kemet Corporation KEM has an Earnings ESP of +7.46% and carries a Zacks Rank #1.

NVIDIA Corporation NVDA has an Earnings ESP of +0.71% and carries a Zacks Rank #1.

Zacks’ Best Private Investment Ideas

While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.

Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.

Click here for Zacks' private trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research