Analyzing iPass (IPAS) and ZIX (ZIXI)

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iPass (NASDAQ: ZIXI) and ZIX (NASDAQ:ZIXI) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Institutional & Insider Ownership

19.4% of iPass shares are owned by institutional investors. Comparatively, 68.9% of ZIX shares are owned by institutional investors. 8.2% of iPass shares are owned by insiders. Comparatively, 3.7% of ZIX shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

iPass has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500. Comparatively, ZIX has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for iPass and ZIX, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
iPass 0 0 3 0 3.00
ZIX 0 1 1 0 2.50

iPass presently has a consensus price target of $1.47, suggesting a potential upside of 511.11%. ZIX has a consensus price target of $5.13, suggesting a potential downside of 6.65%. Given iPass’ stronger consensus rating and higher possible upside, equities research analysts clearly believe iPass is more favorable than ZIX.

Profitability

This table compares iPass and ZIX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
iPass -40.13% -130,046.80% -105.22%
ZIX -10.72% 10.74% 6.13%

Valuation & Earnings

This table compares iPass and ZIX’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
iPass $54.40 million 0.37 -$20.55 million ($0.31) -0.77
ZIX $65.66 million 4.53 -$8.05 million $0.08 68.63

ZIX has higher revenue and earnings than iPass. iPass is trading at a lower price-to-earnings ratio than ZIX, indicating that it is currently the more affordable of the two stocks.

Summary

ZIX beats iPass on 10 of the 14 factors compared between the two stocks.

iPass Company Profile

iPass Inc. provides mobile connectivity that enables Wi-Fi access on various mobile devices in the United States and internationally. It offers mobile connectivity services that provide cloud-based solution allowing customers and their users access to its Wi-Fi network to stay connected to the people and information. The company provides business to business mobile connectivity solutions to large and small enterprises, as well as to strategic partnerships comprising original equipment manufacturers, loyalty programs, software product and service providers, and communication companies; and iPass SmartConnect that takes the guesswork out of Wi-Fi automatically connecting customers to the hotspot for their needs. It operates hotspots at airports, hotels, train stations, convention centers, outdoor venues, inflight, and others. The company sells its services directly through its global sales force, as well as through reseller and strategic partners. iPass Inc. was founded in 1996 and is headquartered in Redwood Shores, California.

ZIX Company Profile

Zix Corporation provides email encryption, threat protection, archiving, bring-your-own-device security, and data loss prevention solutions for the healthcare, financial services, insurance, and government sectors primarily in the United States. The company offers Zix Email Encryption that allows an enterprise to use policy-driven rules to determine email messages that should be sent securely to comply with regulations or company-defined policies. It also provides ZixDirectory, an email encryption community to share identities; Best Method of Delivery, a protocol that automatically determines means of delivery based on the sender's and recipient's communications environment and preferences; and ZixEncrypt, which automatically encrypts and decrypts messages with sensitive content. In addition, the company offers ZixProtect that defends organizations from zero-day malware, ransomware, phishing, CEO fraud, W-2 phishing attacks, spam, and viruses in email; and ZixArchive, a cloud-based email retention solution that enables user retrieval, compliance, and e-discovery. Further, it provides ZixOne, a mobile email app, which offers access to corporate email while never allowing that data to be persistently stored on the device where it is vulnerable to loss or theft. Zix Corporation offers its services through a direct sales force; and a network of resellers and other distribution partners. The company was formerly known as ZixIt Corporation and changed its name to Zix Corporation in 2002. Zix Corporation was founded in 1983 and is headquartered in Dallas, Texas.

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