Back to top

Image: Bigstock

j2 Global (JCOM) to Report Q2 Earnings: What's in Store?

Read MoreHide Full Article

j2 Global (JCOM - Free Report) is set to report second-quarter 2019 results on Aug 6.

Notably, the company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average positive surprise being 4.4%.

In first-quarter 2019, adjusted earnings of $1.40 per share comfortably beat the Zacks Consensus Estimate by 8 cents and increased 14.8% year over year.

Revenues inched up 1.8% year over year to $304.5 million, handily outpacing the consensus mark of $296 million.

The Zacks Consensus Estimate for second-quarter 2019 earnings has stayed flat at $1.52, over the past 30 days. The figure indicates growth of 1.3% from the year-ago quarter’s reported figure.

The consensus mark for revenues, which is pegged at $318.5 million, indicates growth of 10.6% from the year-ago quarter’s reported figure.

j2 Global, Inc. Price and EPS Surprise


j2 Global, Inc. Price and EPS Surprise

j2 Global, Inc. price-eps-surprise | j2 Global, Inc. Quote


Let’s see how things are shaping up for this announcement.

Factors to Consider

Cloud services subscriber revenues are expected to grow rapidly, driven by organic as well as benefits from acquisitions. Strategic acquisitions have been strengthening the company’s footprint in services like VPN and security.

The increasing user awareness of surveillance in digital lives is spurring demand for tools that protect privacy. The buyouts of IPVanish and assets have helped j2 Global in protecting users on unsecured Wi-Fi as well as shield their Internet-browsing activities. This must have expanded its user base, thereby driving top-line growth in the to-be-reported quarter.

In the second quarter, j2 Global bought certain assets of Idea First Technologies. The company also strengthened its VPN portfolio by acquiring Highwinds Capital and Cloak Holdings.

Further, the company’s growing footprint among small and medium-sized business is a key catalyst.

However, sluggishness in the data backup business is expected to hurt the company’s top-line growth.

Moreover, margins are likely to remain under pressure, as revenue contribution from the lower-margin Digital Media segment increases in the top-line mix. Ongoing investments in cybersecurity are also likely to dent profitability in the June-end quarter.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.  Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided.

j2 Global currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

CACI International (CACI - Free Report) has an Earnings ESP of +4.02% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cisco Systems (CSCO - Free Report) has an Earnings ESP of +1.53% and a Zacks Rank #2.

BrightView Holdings (BV - Free Report) has an Earnings ESP of +0.86% and a Zacks Rank #2.


Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>