ACOM Ancestry.Com Inc. (MM)

Ancestry.com, Inc. (ACOM) has been trading strong for the last year, recently spiking into a new all-time high after reporting a 12.5% Q1 earnings surprise. With estimates on the rise and a bullish 25% growth projection, this Zacks #1 rank stock has a bullish lineage.

Company Description

Ancestry.com operates as an online resource for family history worldwide. The company was founded in 1983, changed its name from The Generations Network in 2009 and has a market cap of $1.66 billion.

ACOM has pumped out some serious gains over the last year, recently hitting a new all-time high after reporting another strong quarter.

First-Quarter Results

Revenue for the period was up 41% from last year to $91 million. Earnings also came in strong at 18 cents, 12.5% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 19% over the last four quarters.

The company's share gains mirror the growth of its subscriber base, with total subscribers up 33% from last year to 1.6 million. Ancestry is also seeing its average revenue per customer grow, increasing 8% from last year to $18.05.

Financial Profile

The company has also leveraged its recent earnings momentum to strengthen its balance sheet, with cash and equivalents up $46 million from last year to $102 million against no long-term debt.

Estimates

We saw some pretty solid movement in estimates off the good quarter, with the current year jumping 12% to $1.16. The next-year estimate is pegged at $1.45, a bullish 25% growth projection.

Valuation

In light of recent gains, the valuation picture is a bit rich, with a PEG ratio of 1.28, above the traditional benchmark of 1.

12-Month Chart

On the chart, shares hit a new all-time high on the good quarter but have since pulled back a bit in the choppy market. Look for support from the long-term trend on any weakness, take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
 
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