Carbonite (CARB) and ZIX (ZIXI) Critical Review

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

Volatility & Risk

Carbonite has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, ZIX has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Carbonite $239.46 million 5.05 -$4.00 million $0.50 71.94
ZIX $65.66 million 3.98 -$8.05 million $0.08 60.38

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Carbonite and ZIX, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carbonite 0 1 10 0 2.91
ZIX 0 1 1 0 2.50

Carbonite presently has a consensus price target of $39.09, indicating a potential upside of 8.68%. ZIX has a consensus price target of $5.13, indicating a potential upside of 6.11%. Given Carbonite’s stronger consensus rating and higher possible upside, analysts plainly believe Carbonite is more favorable than ZIX.

Profitability

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

Net Margins Return on Equity Return on Assets
Carbonite 0.39% 46.67% 6.40%
ZIX -10.72% 10.74% 6.13%

Institutional & Insider Ownership

84.4% of Carbonite shares are owned by institutional investors. Comparatively, 69.1% of ZIX shares are owned by institutional investors. 9.8% of Carbonite shares are owned by insiders. Comparatively, 3.7% of ZIX shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Carbonite beats ZIX on 13 of the 14 factors compared between the two stocks.

Carbonite Company Profile

Carbonite, Inc., together with its subsidiaries, provides backup, disaster recovery, high availability, and workload migration technology solutions in the United States. Its solutions include Carbonite Safe that offers annual and multi-year cloud backup plans for individuals or businesses; and Carbonite Endpoint Protection that protects the data, which resides on an organization's computers, laptops, tablets, and smartphones. The company's solutions also comprise Carbonite Hybrid Backup, which protects a customer's data footprint on-premise and in the cloud and enables recovery while version history stored in the cloud safeguards against disaster; Carbonite Cloud Backup that automatically backs up data to the cloud and keeps physical and virtual systems protected with point-in-time restore; and Carbonite Onsite Backup, a flexible data protection solution, which backs up and replicates data securely across a customer's own private network. In addition, it offers Carbonite Availability that keeps critical business systems available on Windows and Linux servers; Carbonite Recover, a disaster recovery-as-a-service solution that securely replicates critical systems from a customer's primary environment to the cloud; Carbonite Migrate, which migrates physical, virtual, and cloud workloads to and from any environment with minimal risk and near-zero downtime; and Carbonite Email Archiving that provides MailStore offerings designed to meet the specific email archiving needs of customers in terms of performance, stability, functionality, and simplicity. The company provides its solutions through distributors, value-added resellers, managed service providers, and global systems integrators. Carbonite, Inc. was founded in 2005 and is headquartered in Boston, Massachusetts.

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 a0lso 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. It has strategic partnership with Digital Guardian to deliver email encryption with enterprise data loss prevention. 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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