Zix Corporation (NASDAQ: ZIXI) and LivePerson (NASDAQ:LPSN) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Institutional and Insider Ownership

68.2% of Zix Corporation shares are held by institutional investors. Comparatively, 74.9% of LivePerson shares are held by institutional investors. 4.5% of Zix Corporation shares are held by insiders. Comparatively, 11.7% of LivePerson shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Zix Corporation and LivePerson’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Zix Corporation $63.16 million 4.45 $13.98 million $0.12 43.25
LivePerson $215.63 million 3.89 $8.16 million ($0.50) -28.50

Zix Corporation has higher revenue, but lower earnings than LivePerson. LivePerson is trading at a lower price-to-earnings ratio than Zix Corporation, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Zix Corporation has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, LivePerson has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Profitability

This table compares Zix Corporation and LivePerson’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zix Corporation 10.48% 16.24% 9.70%
LivePerson -13.29% -8.71% -5.58%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Zix Corporation and LivePerson, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zix Corporation 0 1 1 0 2.50
LivePerson 0 2 4 0 2.67

Zix Corporation currently has a consensus target price of $6.75, indicating a potential upside of 30.06%. LivePerson has a consensus target price of $12.48, indicating a potential downside of 12.46%. Given Zix Corporation’s higher possible upside, equities analysts clearly believe Zix Corporation is more favorable than LivePerson.

Summary

Zix Corporation beats LivePerson on 7 of the 13 factors compared between the two stocks.

Zix Corporation Company Profile

Zix Corporation offers e-mail encryption, data loss prevention and bring-your-own-device (BYOD) security to meet business data protection and compliance needs. The Company operates through e-mail encryption and security solutions. Its Zix Email Encryption enables the secure exchange of e-mails that include sensitive information through a secure messaging service. It offers ZixDirectory, an e-mail encryption community that is designed to share identities of its members; Best Method of Delivery, which is designed to deliver e-mail, and ZixGateway, which automatically encrypts and decrypts messages with sensitive content. ZixCorp delivers over 1.5 million encrypted messages on a typical business day. On an average, 70% of those encrypted messages are exchanged between senders and recipients. It also offers ZixQuarantine, an e-mail-specific solution. Its ZixOne is a mobile e-mail application that solves the information technology (IT) challenge created by the BYOD trend in the workplace.

LivePerson Company Profile

LivePerson, Inc. (Liveperson) is a provider of mobile and online business messaging technologies that power digital communication between brands and consumers. The Company’s segments include Business and Consumer. The Business segment enables brands to leverage its cloud-based LiveEngage’s intelligence engine. The Consumer segment facilitates online transactions between independent service providers (Experts) and individual consumers (Users) seeking information and knowledge for a fee through mobile and online messaging. The Company’s platform, LiveEngage, enables businesses to create a meaningful connection with consumers by offering messaging as a preferred channel of communication. The Company’s products and services include LiveEngage, Professional Services and Consumer Offering. As a cloud computing or software-as-a-service (SaaS) provider, LivePerson provides solutions on a hosted basis. LiveEngage enables the combination of real time on-site data and off-site behavioral data.

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