Web.com Expands in Slower Market

Web.com (WWWW - Snapshot Report) is a leading provider of Web services for small and medium businesses (SMBs). The company uses a factory approach that is applicable for thousands of customers.

Web.com posted good Q1 results with revenue and EPS exceeding our estimate as well as the company's guidance. With the acquisition of Solid Cactus, WWWW is expected to hold a strategic position in the SMB market.

Though the company is currently feeling a pressure from a slowing consumer market, which many of its customers cater to, the long-term outlook still looks bright, and the company's new alliance with Chase Paymentech is expected to help its SMB merchants.

The company has a healthy balance sheet with no debt. We maintain our Buy recommendation for WWWW with a six-month target price of $6.50.

Nayan Mukherjee contributed to this report.