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Snowball research notes – price crash series

Why ZIX Corporation Shares Crashed 16.5%?

by | Mar 2, 2019

ZIX Corporation (ZIXI)

M.Cap: $390 million

The company offers email encryption, advanced threat protection, archiving, Bring-Your-Own-Device (BYOD) security, and data loss prevention (DLP) to meet business data protection and compliance needs.

Reason for the stock price crash

The shares of ZIX Corporation declined 16.5% after the release of fourth quarter 2018 and full year financial results. Even though the company met its own target and delivered strong financial results, the company’s stock price crashed significantly – this could be due to the company’s 2019 projection – which expects the company’s fully diluted GAAP earnings per share to be between ($0.12) and ($0.01) in spite of expecting revenue to grow by minimum of 134%.

Additional notes

  • For the fourth quarter of 2018, the company’s revenue increased 10% to a record $18.4 million. Adjusted EBITDA increased 14% to a record $5.6 million, representing an adjusted EBITDA margin of 30.2%.
  • For the fiscal year of 2019, the company forecasts revenue to range between $164.0 million and $167.0 million, representing an increase of between 134% and 138% compared to the fiscal year 2018. The company forecasts fully diluted GAAP earnings per share to be between ($0.12) and ($0.01) and fully diluted non-GAAP adjusted earnings per share excluding deferred tax (benefit) expense to be between $0.30 and $0.33 for the fiscal year 2019.

Zix Reports Fourth Quarter and Full Year 2018 Financial Results

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