j2 Global Inc.
), a leading provider of unified messaging capabilities, is slated
to report its first-quarter 2014 results after the closing bell on
May 8, 2014.
In the last quarter, the company had delivered an 11.6% positive
earnings surprise. Let us have a brief look at the factors likely
to influence the upcoming earnings results.
Factors at Play This Quarter
Record revenue growth, lower churn rate, higher EBITDA and free
cash flow will continue to act as tailwinds for the company in the
first quarter. The improving performance can primarily be
attributed to the company's diversification into cloud business,
installation of a media business and initiation of the intellectual
On the flip side, j2 Global's business remains sensitive to
overall macroeconomic factors, particularly weakness in credit
markets. The company has a vast majority of credit-sensitive
customers from the lending and mortgage industries and other
financial institutions. Although revenues from these sources
reflect a growing trend, we are apprehensive that future estimates
may become volatile due to global economic challenges.
Our proven model does not conclusively show that j2 Global is
likely to beat the Zacks Consensus Estimate this quarter. This is
because a stock needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this
is not the case here as elaborated below.
Both the Most Accurate estimate and the Zacks Consensus Estimate
are poised at 67 cents. Hence, the ESP is 0.00%.
: j2 Global has a Zacks Rank #3 (Hold).
We caution investors against this stock approaching the earnings
announcement, as a Zacks Earnings ESP of 0.00% combined with a
Zacks Rank #3 makes surprise prediction difficult.
Note that Sell-rated stocks (#4 and 5) should never be
considered going into an earnings announcement.
Other Stocks to Consider
Here are some other companies you might consider as our model
shows these have the right combination of elements to post an
earnings beat this quarter.
Constant Contact, Inc.
), with earnings ESP of +20.0% and a Zacks Rank #2 (Buy).
Scripps Networks Interactive, Inc.
), with earnings ESP of +1.24% and a Zacks Rank #3 (Hold).
AMC Networks Inc.
) with earnings ESP of +0.89% and a Zacks Rank #3 (Hold).
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