A quick comparison to search giant Yahoo! Inc. [NASDAQ:YHOO] and smaller advertising company ValueClick Inc. [NASDAQ:VCLK] suggests the tiny internet search and advertising company Local.com Corp. [NASDAQ:LOCM] is undervalued.

Yahoo! has as of late failed to impress investors and yet the stock price minus cash and investments – $8.37 - divided by earnings expectations for this year of .69 gives it a multiple of just above 12 times.  This is for a company that analysts predict will have 7% year over year growth in 2011.  ValueClick has a similar enterprise value of about $8.84 a share with analysts only predicting .59 earnings this year.  That’s an enterprise multiple of 15 times for a company that analysts predict will have 8% growth.

Local.com appears to be flying under the radar with price minus cash of $6.75 as of close of business today (and that’s after rising a bit in the past week) and analysts predicting .72 (that number should go up to something around .75 after increased numbers were announced).  That yields a multiple of 9 or just above 9.  That’s with analysts predicting 17% growth the following year.  In addition, management yesterday emphasized that current 15% margins should improve in 2011.  Current 2011 analyst estimates assume a lower 14% margin.  If margins were to be more like 17%, for example, that would yield $1 earnings based on revenue estimates in 2011.  At Yahoo’s multiple, that would get $12.70 (plus the extra positive cash flow).  At ValueClick’s multiple, it’s $15.70, or more than double from current prices.  Those are 70% and 110% higher prices than the stock's current closing price.

The bottom line is that Local.com appears to be significantly undervalued…