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j2 Global (JCOM) to Report Q2 Earnings: What's in Store?

Zacks Equity Research

j2 Global JCOM is set to report second-quarter 2019 results on Aug 6.

Notably, the company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average positive surprise being 4.4%.

In first-quarter 2019, adjusted earnings of $1.40 per share comfortably beat the Zacks Consensus Estimate by 8 cents and increased 14.8% year over year.

Revenues inched up 1.8% year over year to $304.5 million, handily outpacing the consensus mark of $296 million.

The Zacks Consensus Estimate for second-quarter 2019 earnings has stayed flat at $1.52, over the past 30 days. The figure indicates growth of 1.3% from the year-ago quarter’s reported figure.

The consensus mark for revenues, which is pegged at $318.5 million, indicates growth of 10.6% from the year-ago quarter’s reported figure.
 

j2 Global, Inc. Price and EPS Surprise

 

j2 Global, Inc. Price and EPS Surprise

j2 Global, Inc. price-eps-surprise | j2 Global, Inc. Quote

 

Let’s see how things are shaping up for this announcement.

Factors to Consider

Cloud services subscriber revenues are expected to grow rapidly, driven by organic as well as benefits from acquisitions. Strategic acquisitions have been strengthening the company’s footprint in services like VPN and security.

The increasing user awareness of surveillance in digital lives is spurring demand for tools that protect privacy. The buyouts of IPVanish and Encrypt.me assets have helped j2 Global in protecting users on unsecured Wi-Fi as well as shield their Internet-browsing activities. This must have expanded its user base, thereby driving top-line growth in the to-be-reported quarter.

In the second quarter, j2 Global bought certain assets of Idea First Technologies. The company also strengthened its VPN portfolio by acquiring Highwinds Capital and Cloak Holdings.

Further, the company’s growing footprint among small and medium-sized business is a key catalyst.

However, sluggishness in the data backup business is expected to hurt the company’s top-line growth.

Moreover, margins are likely to remain under pressure, as revenue contribution from the lower-margin Digital Media segment increases in the top-line mix. Ongoing investments in cybersecurity are also likely to dent profitability in the June-end quarter.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.  Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided.

j2 Global currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

CACI International CACI has an Earnings ESP of +4.02% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cisco Systems CSCO has an Earnings ESP of +1.53% and a Zacks Rank #2.

BrightView Holdings BV has an Earnings ESP of +0.86% and a Zacks Rank #2.

 

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