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Here's Why You Should Dump j2 Global From Your Portfolio
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On Apr 3, j2 Global, Inc. was downgraded to a Zacks Rank #5 (Strong Sell).
Of late, the stock has been witnessing downward estimate revisions. The Zacks Consensus Estimate for fiscal 2018 declined 8 cents to $6.02 over the last 30 days. However, consensus estimates for fiscal 2019 has remained steady at $6.48.
The negative estimate revision was primarily due to disappointing fourth-quarter 2017 results. The company’s earnings of $1.79 per share missed the Zacks Consensus Estimate by a couple of cents.
Notably, j2 Global lagged the Zacks Consensus Estimate in the trailing four quarters, recording a negative average surprise of 2.59%.
Moreover, leveraged balance sheet as well as increasing integration risks rising from frequent acquisitions is anticipated to stall growth in the near term.
Shares of j2 Global have lost 7.1% in the past year against 33.1% rally of the industry it belongs to.
Factors Affecting Growth
We expect higher costs pertaining to sales and marketing to limit bottom-line growth in the near term. In the fourth quarter of 2017, total operating expenses surged 35.4% from the year-ago quarter to $194.2 million.
Moreover, increasing costs related to the company's frequent acquisitions are also projected to hurt the bottom line. In the last quarter, the company completed four acquisitions.
Additionally, j2 Global has a highly leveraged balance sheet, which is a significant concern. In the fourth quarter, long-term debt increased 66.2% to $1 billion. Further, ratio of its long-term debt-to-equity currently is pegged at 98%.
Free cash flow also declined almost 9% on a year-over-year basis.
Long-term earnings growth rate for Nice, Paycom and Veeva are currently pegged at 12.50%, 24.75% and 17%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Here's Why You Should Dump j2 Global From Your Portfolio
On Apr 3, j2 Global, Inc. was downgraded to a Zacks Rank #5 (Strong Sell).
Of late, the stock has been witnessing downward estimate revisions. The Zacks Consensus Estimate for fiscal 2018 declined 8 cents to $6.02 over the last 30 days. However, consensus estimates for fiscal 2019 has remained steady at $6.48.
The negative estimate revision was primarily due to disappointing fourth-quarter 2017 results. The company’s earnings of $1.79 per share missed the Zacks Consensus Estimate by a couple of cents.
Notably, j2 Global lagged the Zacks Consensus Estimate in the trailing four quarters, recording a negative average surprise of 2.59%.
Moreover, leveraged balance sheet as well as increasing integration risks rising from frequent acquisitions is anticipated to stall growth in the near term.
Shares of j2 Global have lost 7.1% in the past year against 33.1% rally of the industry it belongs to.
Factors Affecting Growth
We expect higher costs pertaining to sales and marketing to limit bottom-line growth in the near term. In the fourth quarter of 2017, total operating expenses surged 35.4% from the year-ago quarter to $194.2 million.
Moreover, increasing costs related to the company's frequent acquisitions are also projected to hurt the bottom line. In the last quarter, the company completed four acquisitions.
Additionally, j2 Global has a highly leveraged balance sheet, which is a significant concern. In the fourth quarter, long-term debt increased 66.2% to $1 billion. Further, ratio of its long-term debt-to-equity currently is pegged at 98%.
Free cash flow also declined almost 9% on a year-over-year basis.
Stocks to Consider
Nice (NICE - Free Report) , Paycom Software (PAYC - Free Report) and Veeva Systems (VEEV - Free Report) are stocks worth considering in the same sector. All the three stocks sport Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Nice, Paycom and Veeva are currently pegged at 12.50%, 24.75% and 17%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>