“Ancestry.com, Inc. (ACOM) operates the world’s largest online family history database. With over 10 billion records, the company’s archives include ship passenger lists, birth and death records and U.S. Census information. A growing collection of user- generated data has boosted content. Ancestry.com had 1.87 million subscribers on March 31, up 16% from a year earlier and nearly double the level of just three years ago.
“Lower customer turnover and steady subscriber gains, fueled partly by product launches and database enhancements, should drive earnings growth. In May, the company launched a genetic test that is linked to a global database of DNA samples. For full-year 2012, Wall Street expects per-share earnings to increase 22% on 16% revenue growth. Over the next five years, per-share profits are expected to increase at an 18% annualized rate. Ancestry.com, with a Quadrix Overall score of 98, is being initiated as a Buy.”
Richard J. Moroney, CFA, Upside, July 7, 2012