j2 Global Inc.
), a leading provider of unified messaging capabilities, has
recently declared impressive second-quarter 2012 results where both
its top and bottom line beat Zacks Consensus Estimates.
During the reported quarter, j2 Global achieved a significant
milestone by generating record low churn rate of 2.3%. Moreover,
continuous improvement of Subscriber Usage revenue (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 MediaburstLimited in Europe, j2 Global
has become a worldwide leader in the virtual PBX market.
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.
) may act as headwinds for the company going forward.
Moreover, the company's business is dependent on a small number
of telecommunications 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 #3 Rank, implying a short-term
Hold rating on the stock.
J2 GLOBAL INC (JCOM): Free Stock Analysis
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