Opinion on  United Online Inc. (UNTD)     Sector: Technology  >  Industry: Computer Services
United Online Inc.

United Online is a leading nationwide Internet Service Provider (ISP). The company commenced operations as the result of its acquisition of NetZero and Juno Online Services - two of the leading Internet access brands in the United States and Canada. Through its subsidiaries, United Online offers both free and value-priced Internet access services in more than 5,000 cities. General Information UTD ONLINE INC 21301 Burbank Boulevard Woodland Hills, CA 91367 Phone: 818 287-3000 Fax: 805 418-2001 Web: www.unitedonline.net Email: investor@untd.com Industry INTERNET SERVICES Sector: Computer and Technology Fiscal Year End December Last Reported Quarter 03/31/09 Next EPS Date 08/04/2009 Price and Volume Information Zacks Rank Yesterday's Close 7.14 52 Week High 12.50 52 Week Low 3.76 Beta 1.57 20 Day Moving Average 645,836.94 Target Price Consensus 11.02 % Price Change Relative to S&P 500 4 Week 27.57 12 Week 26.86 YTD 19.62 Share Information Shares Outstanding (millions) 82.15 Market Capitalization (millions) 594.75 Short Ratio 4.71 Last Split Date 11/03/2003 Dividend Information Dividend Yield 5.52% Annual Dividend $0.40 Payout Ratio 0.40 Change in Payout Ratio -0.22 Last Dividend Payout / Amount 02/11/2009 / $0.10 EPS Information Current Quarter EPS Consensus Estimate 0.28 Current Year EPS Consensus Estimate 1.09 Estimated Long-Term EPS Growth Rate 11.00 Next EPS Report Date 08/04/2009 Consensus Recommendations Current (1=Strong Buy, 5=Strong Sell) 2.00 30 Days Ago 2.00 60 Days Ago 2.00 90 Days Ago 1.75 Fundamental Ratios P/E Current FY Estimate: 6.62 Trailing 12 Months: 7.17 PEG Ratio 0.60 EPS Growth vs. Previous Year 84.21% vs. Previous Quarter 40.00% Sales Growth vs. Previous Year 116.44% vs. Previous Quarter: 2.92% Price Ratios Price/Book 1.67 Price/Cash Flow 5.73 Price / Sales 0.73 ROE 03/31/09 19.83 12/31/08 15.51 09/30/08 14.77 ROA 03/31/09 8.12 12/31/08 7.44 09/30/08 8.54 Current Ratio 03/31/09 1.57 12/31/08 0.85 09/30/08 0.73 Quick Ratio 03/31/09 - 12/31/08 0.85 09/30/08 0.73 Operating Margin 03/31/09 9.91 12/31/08 9.55 09/30/08 11.56 Net Margin 03/31/09 -7.86 12/31/08 -10.66 09/30/08 17.86 Pre-Tax Margin 03/31/09 -7.86 12/31/08 -10.66 09/30/08 17.86 Book Value 03/31/09 4.34 12/31/08 4.20 09/30/08 7.65 Inventory Turnover 03/31/09 - 12/31/08 - 09/30/08 - Debt-to-Equity 03/31/09 1.15 12/31/08 1.14 09/30/08 0.76 Debt to Capital 03/31/09 53.43 12/31/08 53.21 09/30/08 43.17

United Online, Inc. (UNTD) is parlaying its social networking site, Classmates.com, into bigger profits as pay accounts jumped 30% over a year ago. UNTD trades with a PEG ratio of just 0.62. Company Description United Online operates Internet retail and social networking sites. The company runs FTD and Interflora brands and web sites (www.ftd.com and www.interflora.co.uk) both of which use the Mercury Man logo in 45,000 retail floral shops around the world. United Online also operates social networking site Classmates Media (www.Classmates.com) in North America and Europe and online loyalty marketing (www.MyPoints.com) in North America. The company's communication services include value-priced Internet access and email providers NetZero and Juno. United Online Surprised by 45.83% in the First Quarter On May 5, United Online reported first quarter 2009 results that easily surprised on analysts' estimates of 24 cents by 11 cents, or 45.83%. Total revenue was up 116% year over year but included FTD which was acquired in August 2008. Classmates Media revenue jumped 13% to $58.5 million from $51.9 million. Pay accounts increased 30% to a record 4.6 million from 3.5 million at the end of the first quarter of 2008. Communication revenue, however, fell by 18% to $57.4 million from $69.9 million. "We achieved adjusted OIBDA of $61.5 million in the first quarter, reflecting strong contributions from each of our operating segments," said Mark R. Goldston, Chairman and CEO. "Excluding the FTD segment for comparability with the prior year, adjusted OIBDA increased to a first quarter record $40.4 million and was driven by a 34% year-over-year increase in segment adjusted OIBDA to $15.8 million within our Classmates Media segment, its best-ever performance for a first quarter," he added. Cash Increased The company raised its cash hoard during the quarter to $124.8 million from $104.5 million at the end of Dec 2008. Total debt fell $4.6 million to $408.9 million at the end of the quarter. United Online also recently announced a quarterly cash dividend of 10 cents per share, which results in a current yield of 5.40%. It was the 17th consecutive quarterly dividend. Consensus Estimates Jump Given the solid quarter, covering analysts are rushing to raise full-year estimates. 3 out of 3 covering analysts increased second quarter estimates by an average of 2 cents to 28 cents per share. 2009 consensus estimates climbed 9% in the last week to $1.09 from $1.00 per share. Value Fundamentals United Online is a Zacks #1 Rank (strong buy) stock. It has attractive value characteristics as it's trading at only 6.9x forward earnings. Its price-to-book is also just 1.72. The company has an outstanding 5-year average return on equity (ROE) of 20.66%.