Is j2 Global (JCOM) Poised to Beat Earnings Estimates? - Analyst Blog


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Delaware-based j2 Global Inc. ( JCOM ), a leading provider of unified messaging capabilities, is slated to report its fourth-quarter 2013 financial results after the closing bell on Feb 13, 2014.

In the last quarter, the company delivered a 7.14% earnings surprise. We will briefly discuss those factors which will influence the earnings results.

Factors to Influence This Quarter

At present, j2 Global commands approximately 30% of the world's cloud-based digital faxing system. The company was able to reinvigorate sales from credit-sensitive clients, despite facing global macroeconomic volatility. Segment wise, the company continues to grow its most powerful eFax brand with creative content and designs. Strong free cash flow and low leverage have induced the company to execute five buyouts in 2013.

j2 Global is confident about its growth prospect owing to increasing demand for cloud based, value-added communication, messaging and data backup services.

The company's business is sensitive to overall macroeconomic factors, particularly weakness in credit markets. The company has a vast majority of credit-sensitive customers from lending and mortgage industries and other financial institutions. Moreover, competition in the outsourced, value-added messaging and communications industry is fierce and continues to intensify. Thus, this is likely to increase the operating expenses.

Earnings Whispers

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 Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below.The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are poised at $0.69. Hence, the ESP is 0.00%.

Zacks Rank #3 (Hold): j2 Global's Zacks Rank #3 decreases the predictive power of ESP.

We caution investors against the stock going into the earnings announcement, as a Zacks Earnings ESP of 0.00% combined with a Zacks Rank #3 lowers the possibility of an earnings surprise.

Other Stocks to Consider

Here are some other companies to might consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

Tableau Software, Inc. ( DATA ) with earnings ESP of +16.67% and Zacks Rank #3.

The Walt Disney Company ( DIS ) with earnings ESP of +1.10% and Zacks Rank #2 (Buy).

AMC Networks Inc. ( AMCX ) with earnings ESP of +5.20% and Zacks Rank #3.

AMC NETWORKS- A (AMCX): Free Stock Analysis Report

TABLEAU SOFTWAR (DATA): Free Stock Analysis Report

DISNEY WALT (DIS): Free Stock Analysis Report

J2 GLOBAL INC (JCOM): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
More Headlines for: AMCX , DATA , DIS , JCOM

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