I first wrote about Zix Corporation (NASDAQ:ZIXI) back in late July when it was trading at $2.50 a share. The stock has climbed to over $2.90 since and is starting to pick up some positive catalysts. ZIXI now looks poised for its next move up.
Key recent positives for ZIXI:
- Meldrum Group has now become the largest shareholder in Zix Corporation with over 10% of the company's outstanding shares and is pushing to replace three of the company's directors.
- In its recent earnings report the company grew sales better than 15%. This was the 15th straight quarter of record revenues.
- The new order component of sales grew a more impressive 31% Y/Y, a good omen for recurring revenue in the years ahead.
- Zix Corporation stated during the earnings conference call that it expects to be at or near the high end its previous revenue guidance of $42 million to $43 million for the full year 2012.
Zix Corporation provides email encryption solutions in software as a service model in the United States.
4 additional reasons ZIX is solid growth play at under $3 a share:
- The median price target held by the three analysts that cover the stock is $5 a share, 60% above the current stock price.
- The company has a solid balance sheet with approximately 13% of its market capitalization in net cash on its books.
- The stock has a five year projected PEG of under 1 (.88) and is selling at under 14x forward earnings, a significant discount to its five year average (39.5).
- After bottoming recently, the stock has shown technical strength, is consolidating at a higher level and is solidly above its 200 day moving average (See chart).
Disclosure: I am long ZIXI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.