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Zix Corporation Message Board

  • bubbizix bubbizix Feb 19, 2013 8:41 PM Flag

    OUCH IF YOU ARE SHORT RIGHT FROM THE TRANSCRIPT

    Google continues to be the highest producing partner in the OEM category and across the board. As most of you know, Zix is the only email encryption solution that Google resells rebranded as Google Message Encryption or GME. In Q1 of this year, Zix and Google will introduce GME 2.O a new version developed by Zix at Google’s request. GME 2.O will feature tighter integration of Zix inside of Google Apps so that customers can administer their company’s usage directly using the Google app console.

    Sentiment: Strong Buy

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    • Actually I thought that the report, guidance for 2013, decline in margins, first discussion about "settlement" with rPost (which could cost license fees on an ongoing basis), $3mm R&D and 20% R&D of revenue...means one thing...Brooklyn Dodger fans would know with a stutter....WAIT TILL NEXT, NEXT YEAR....Financials in 2013 will just suck (with lots of good rationale, explanations and some decent revenue increases, but tons of expenses and excuses)...and we should now wait for 2014. As it is this stock sells for a huge multiple. On an apples to apples basis, if you leave out their tax loss benefits (which is how PE multiples are usually judged) they earned about $.10/share in 2012 on a GAAP basis (and even using their cockamamie "adjusted" GAAP)...so at $3+ they are over 30 multiple. Their cash flow in 2012 was weak and I still haven't reconciled that because they claim the bulk of it was marketing expenses, but they should have been expensed and thus flowed through the income statement (unless they capitalized them??) and so the net income before tax should have been close to cash flow...but cash flow as much less.

 
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