Web.com (WEB) To Report Q1 Earnings: What's In The Cards?

Web.com Group Inc. (NASDAQ:WEB) is scheduled to release first-quarter 2018 results on May 3. The company has delivered an average positive earnings surprise of 1.40% in the trailing four quarters.

Moreover, the online marketing services provider posted adjusted revenues of $191 million in fourth-quarter 2017 compared with $189 million in the year-ago period.

For first-quarter 2018, Web.com projects non-GAAP revenues to be in the range of $184–$187 million.

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 and Premium Services. The integration of Yodle’s LocalMax into Lead Stream is driving the Premium Services business.

The company’s TORCHx and Lighthouse 360 solutions along with Yodle’s LocalMax offering 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 is helping it to expand in the Latin American market, which has solid growth opportunities. Scoot acquired in 2014 is boosting its growth in the United Kingdom.

Brand awareness initiatives like advertising campaigns to promote Lead Stream are helping it to expand its foothold in the global market.

However, decline in overall retail business and decreasing net new subscribers are headwinds. Also, an increasingly competitive business environment for legacy domains and DIY websites remain concerns.

What Does Our Model Say?

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Web.com has a Zacks Rank #3 and its Earnings ESP is 0.00%. Therefore, our proven model does not conclusively show that the company is likely to deliver a positive surprise this quarter.

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:

Arrow Electronics Inc. (NYSE:ARW) has an Earnings ESP of +0.66% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pandora Media (NYSE:P) has an Earnings ESP of +4.92% and sports a Zacks Rank #3.

Fortinet, Inc. (NASDAQ:FTNT) has an Earnings ESP of +2.07% and carries a Zacks Rank #3.

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