Head to Head Review: FRONTEO (FTEO) & ZIX (ZIXI)
FRONTEO (NASDAQ:FTEO) and ZIX (NASDAQ:ZIXI) are both small-cap business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, earnings, risk, valuation and dividends.
Risk and Volatility
FRONTEO has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, ZIX has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.
69.1% of ZIX shares are owned by institutional investors. 3.7% of ZIX shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares FRONTEO and ZIX’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|FRONTEO||$111.36 million||2.77||-$6.25 million||N/A||N/A|
|ZIX||$65.66 million||4.11||-$8.05 million||$0.08||62.25|
FRONTEO has higher revenue and earnings than ZIX.
This is a summary of current recommendations and price targets for FRONTEO and ZIX, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
FRONTEO presently has a consensus target price of $23.00, suggesting a potential upside of 41.98%. ZIX has a consensus target price of $5.13, suggesting a potential upside of 2.91%. Given FRONTEO’s stronger consensus rating and higher probable upside, analysts plainly believe FRONTEO is more favorable than ZIX.
This table compares FRONTEO and ZIX’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
FRONTEO, Inc. provides Asian-language eDiscovery solutions and services primarily in the United States, Europe, and Asia. The company operates in two segments, Legal Tech Services and Artificial Intelligence (AI) Solutions Services. It has eDiscovery and forensic information documented in Japanese, Korean, Chinese, and English. The company assists clients involved in cross-border litigation, administrative proceedings, and internal investigations, including those related to antitrust investigations, intellectual property litigation, the Foreign Corrupt Practices Act, and product liability investigations. It also provides Lit i View, an online eDiscovery software, which handles Asian-language characters, encoding schemes, and native file systems; and Intelligence Cloud solution to maintain client data during and after a particular litigation or investigation, and data and documents in a relational database of its clients' data and documents. In addition, the company offers electronic data forensic investigation solutions and services that enables the preservation, analysis, processing, and production of electronically stored information in connection with fraud and corporate information leakage; forensic tools; and Lit i View XAMINER, a digital forensic software, and other related hardware and software products. Further, it helps to create document management procedures; conduct corporate risk audits; and comply with legal requirements to provide information to stakeholders. Additionally, the company provides AI solutions in the fields of business intelligence, healthcare, and digital communications. It serves enterprises, government agencies, law firms, and other organizations under the FRONTEO, KIBIT, and Landscaping brands. The company was formerly known as UBIC, Inc. and changed its name to FRONTEO, Inc. in July 2016. FRONTEO, Inc. was founded in 2003 and is headquartered in Tokyo, Japan.
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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