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Zix Corporation (NASDAQ:ZIXI) Just Released Its Third-Quarter Earnings: Here's What Analysts Think

·4 min read

Shareholders might have noticed that Zix Corporation (NASDAQ:ZIXI) filed its quarterly result this time last week. The early response was not positive, with shares down 2.1% to US$6.68 in the past week. Revenues of US$55m beat expectations by a respectable 2.0%, although statutory losses per share increased. Zix lost US$0.05, which was 400% more than what the analysts had included in their models. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Zix

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for Zix from four analysts is for revenues of US$243.4m in 2021 which, if met, would be a notable 15% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 90% to US$0.03. Before this latest report, the consensus had been expecting revenues of US$236.1m and US$0.23 per share in losses. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a loss per share in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of US$10.75, implying that their latest estimates don't have a long term impact on what they think the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Zix analyst has a price target of US$12.00 per share, while the most pessimistic values it at US$10.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Zix's revenue growth will slow down substantially, with revenues next year expected to grow 15%, compared to a historical growth rate of 31% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% next year. Factoring in the forecast slowdown in growth, it looks like Zix is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at US$10.75, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Zix. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Zix analysts - going out to 2021, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Zix (including 1 which is a bit concerning) .

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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