Consensus Cloud SolutionsCCSI46,69 $
Consensus Cloud Solutions (Nasdaq: CCSI) - American cloud business. The company specializes in faxes, and it's not that very promising segment. But the company's business is stable and, in general, can open up in the hands of an activist investor.
When creating the material, sources were used, inaccessible to users from the Russian Federation. We hope, Do you know, what to do.
What do they earn
In time immemorial, about a year ago, American holding J2 Global, like the power of the Romans, split into two halves: for Ziff Davis media assets and cybersecurity and Consensus Cloud Solutions cloud business (CCSI). Today we will talk about the latter.
The company is engaged in the provision of services in the field of cloud fax. It's like a fax, only using cloud services.
Here are the solutions CCSI offers to its clients:
- eFax Corporate - actually, digital fax for the corporate sector.
- eFax for the consumer sector - in fact, it is used by American counterparts of Russian individual entrepreneurs and very small businesses.
- Unite is a platform for choosing protocols and using them to send information in a medical institution.
- jSign - digital and electronic signature solutions.
- Signal - Alert system for back office in hospitals.
- Clarity is a system for processing documents in order to turn them into digital data.
Here's what the annual report tells us about her business:
- Solutions for large companies — 48,12% proceeds.
- Small Business Solutions - 51,71% proceeds.
- The mysterious "other" 0,17% proceeds.
Revenue by country and region:
- USA - 77,92%.
- Canada - 12,8%.
- Ireland - 6,21%.
- Other, unnamed countries - 3,07%.
Arguments in favor of the company
Reliable. The company now has about 45 thousand corporate clients. There are two reasons why online faxes are resilient:
- This communication channel is more secure than regular fax and email..
- Fax satisfies stringent restrictive regulatory guidelines for sharing information in some sectors with very high levels of personal data.
In the consumer segment, the company's customers are about a million people.. This is a more or less stable audience., And, although this market will slowly fade, here, as with traditional TV, complete cancellation is not possible.
I'm something of a prospective issuer myself. Cloud fax is a very niche thing., and you can't say, how it compares to cloud computing, although at first glance they are "relatives". But they will not give up fax soon - the reception of more advanced methods of communication is difficult, and in the medical field there will even be an increase in demand for the company's solutions: there digitalization means just accepting cloud fax.
Don't expect crazy growth., but it will still allow the company, relatively speaking, keep your head above the water.
The size. The company has a very small capitalization - approximately $1.11 billion. And it's cheap: P / E — about 10,97. This can make its quotes very susceptible to an influx of investors.. It seems to me, in her case, speculative pumping by investors is possible, who will see "cheap cloud business" in front of them, which is vanishingly rare on the stock exchange. It's unlikely they'll figure it out, that the company operates in the much less romantic fax industry.
Activate, you are welcome. It seems to me, that the company may well be attacked by some activist investor in order to force the management to sell it. This is a very typical target.: seems to be a working and marginal business, but in a slowly dying realm. You can call on the company's management to change the company's development policy. Or again put it up for sale.
What can get in the way
Accounting. In the "divorce" Ziff Davis hung a bunch of debts on CCSI. Therefore, at the moment, CCSI has debts of 895.477 million, of which only 77.963 million will need to be repaid during the year. Basically, the company has enough money to close urgent debts: there are 66.778 million on the account and 24.829 million debts of counterparties.
The presence of such a large debt will burden the company and scare investors away from its quotes..
Fun and scary. Probably, the company will invest in the development of new, more promising sectors. This is the logical decision in her situation., but all this will come at the expense of declining profitability and building up an already huge debt burden.
But if it does not develop in this direction, then it will eventually face a strong drop in revenue and profit.
CCSI will be of interest primarily as a potential target for an activist investor. However, may be, the company's management itself will come to conclusions about the need to develop their business in a different way. In this case, the company's quotes may rise significantly.