We maintain our bullish view on J2 Global (JCOM), the holding company of various digital media and cloud service businesses such as IGN, PC Mag, and MyFax. Since our first coverage last November, the shares price has been down by ~26%, mostly due to the COVID-19 impact on some of its businesses. J2 Global expects Q2 revenue to be slightly down YoY, as the cloud business sees slowdowns. The long-term prospect remains intact nonetheless, with J2 Global well-positioned to ride out the pandemic given its strong balance sheet and more resilient healthcare and gaming businesses.

Catalyst

J2 Global’s healthcare businesses, such as Everyday Health and Medpage, have been resilient and gained strong traction amid the pandemic. Everyday Health’s organic ad revenue growth reached 5% in April, while Medpage Today saw a 33% increase in physician promo revenues in Q1. Given that J2 Global generates 40% of its ad revenues from the health category, we believe that J2 Global should continue to benefit from its healthcare businesses in the near term as well as longer term.

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