j2 Global Inc.
), a leading provider of unified messaging capabilities recently
declared solid third-quarter 2012 results where both its top and
bottom lines beat the Zacks Consensus Estimates.
During the reported quarter, j2 Global achieved few
significant milestones such as record low churn rate of less than
2.3%, record high EBITDA growth of $50 million. Moreover,
continuous improvement of Subscriber Usage revenue (This is an
important parameter as credit-sensitive customers constitute a
majority of j2 Global's sales.) will further act as strong
tailwind for the company going forward.
At present, j2 Global commands approximately 30% of the world
digital faxing system. With the acquisition of Phone People
Holding Corporation in the U.S. and Mediaburst Limited in Europe,
j2 Global has become a worldwide leader in the virtual PBX
market. Moreover, the recent purchase of Ziff Davis Inc. will
further help the company to diversify its business into digital
Backed by solid cash position, j2 Global continues to hike
dividend and accelerate share repurchase plan, which will in turn
continue to drive shareholders wealth in the long run.
On the flip side, sluggish economic growth coupled with stiff
competition from other value-added messaging and communications
service providers like
Open Text Corp.
Websense, Inc. (
may act as headwinds for the company going forward. Moreover, the
company's business is dependent on a small number of
telecommunication carriers in each geographic region. j2 Global's
business will suffer if it is unable to obtain or retain
telephone numbers or is prohibited from obtaining local
We, thus maintain our long-term Neutral recommendation on j2
Global Inc. Currently, it has a Zacks #2 Rank, implying a
short-term Buy rating on the stock.
J2 GLOBAL INC (JCOM): Free Stock Analysis
OPEN TEXT CORP (OTEX): Free Stock Analysis
WEBSENSE INC (WBSN): Free Stock Analysis
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