Web.com Group should undergo some profit-taking after the rebound in recent sessions.

From a fundamental viewpoint, firstly, we note the high valuation of the company knowing that the group is not profitable anymore and could make first profits this year. With a valuation ratio of 3.79x, the group appears overvalued compared to its business activity. Regarding the financial situation, leverage is at 3.54x. Debts are estimated at USD 545M for the current year.

From a technical viewpoint, the proximity of the USD 33.4 medium-term resistance limits the upside potential on the stock. The uptrend in the short term could be stopped by this level and prices could decrease in the coming sessions. Technical indicators also show an overbought situation that reinforces this bearish scenario. Thus, there is a higher downside potential than upside.

The technical configuration and fundamentals lead us to predict a consolidation phase, at least in the short term. The USD 33.4 should play its full role and stop the upward trend initiated in the short term. Therefore, in order to take advantage of this technical correction, a short position may be opened in the current area to target USD 28.9 and then USD 25.83. In case of further acceleration, the stop loss will be triggered above the USD 33.4.