As of June 10, 2025, Zix Corp has a Discounted Cash Flow (DCF) derived fair value of $13.41 per share. With the current market price at $8.48, this represents a potential upside of 58.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $6.58 |
| DCF Fair Value (10-year) | $13.41 |
| Potential Upside (5-year) | -22.4% |
| Potential Upside (10-year) | 58.1% |
| Discount Rate (WACC) | 6.7% - 9.1% |
Revenue is projected to grow from $218 million in 12-2020 to $629 million by 12-2030, representing a compound annual growth rate of approximately 11.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2020 | 218 | 26% |
| 12-2021 | 256 | 17% |
| 12-2022 | 293 | 15% |
| 12-2023 | 337 | 15% |
| 12-2024 | 369 | 10% |
| 12-2025 | 405 | 10% |
| 12-2026 | 445 | 10% |
| 12-2027 | 486 | 9% |
| 12-2028 | 530 | 9% |
| 12-2029 | 579 | 9% |
| 12-2030 | 629 | 9% |
Net profit margin is expected to improve from -3% in 12-2020 to 7% by 12-2030, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2020 | (6) | -3% |
| 12-2021 | 1 | 0% |
| 12-2022 | 5 | 2% |
| 12-2023 | 11 | 3% |
| 12-2024 | 17 | 5% |
| 12-2025 | 24 | 6% |
| 12-2026 | 27 | 6% |
| 12-2027 | 31 | 6% |
| 12-2028 | 35 | 7% |
| 12-2029 | 39 | 7% |
| 12-2030 | 44 | 7% |
with a 5-year average of $8 million. Projected CapEx is expected to maintain at approximately 6% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2021 | 10 |
| 12-2022 | 13 |
| 12-2023 | 16 |
| 12-2024 | 18 |
| 12-2025 | 19 |
| 12-2026 | 22 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 54 |
| Days Inventory | 0 |
| Days Payables | 51 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2021 | 6 | 0 | 4 | 3 | (1) |
| 2022 | 34 | 3 | 17 | (4) | 18 |
| 2023 | 48 | 7 | 20 | 6 | 15 |
| 2024 | 61 | 11 | 21 | 5 | 24 |
| 2025 | 75 | 15 | 24 | 2 | 34 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 6.58 | -22.4% |
| 10-Year DCF (Growth) | 13.41 | 58.1% |
| 5-Year DCF (EBITDA) | 8.88 | 4.7% |
| 10-Year DCF (EBITDA) | 14.66 | 72.9% |
Is Zix Corp (ZIXI) a buy or a sell? Zix Corp is definitely a buy. Based on our DCF analysis, Zix Corp (ZIXI) appears to be significantly undervalued with upside potential of 58.1%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $8.48.