(RTTNews) - Wednesday, FBR Capital Markets upgraded Web.com Group, Inc. (WWWW: News ) shares to Outperform from Market Perform and increased its price target to $9 from $7.

Analyst David Hilal believes that the pressure on the company's end markets is easing and that third quarter of 2009 should mark the inflection point of the company's business. The analyst believes that gross and net subscriber additions are tracking above our expectations in third quarter of 2009.

The analyst said that the company has done a good job of expanding its portfolio of partners over the past year, which should help to generate an increased level of lead flow for the company's Web services products.

The analyst also thinks that subscriber additions should benefit from an increase in the company's online marketing spending. After a steady decline over the past year, the analyst expects ARPU to stabilize in third quarter of 2009 as the company gains better traction upselling higher-value Web services to its low-ARPU hosting subscribers.
The analyst increased his price target from $7 to $9 to reflect his improved sentiment on the company's business. The analyst's new price target of $9 represents 14x his 2010 pro forma EPS estimate, a slight premium to the company's normalized EPS growth rate.

Currently, WWWW is up $0.56 or 8.37% and trading at $7.25.

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by RTT Staff Writer

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