Overview

Zix Corporation (NASDAQ: ZIXI) and Splunk Inc. (NASDAQ: SPLK) are both classified as application software companies, but they serve substantially different markets and use cases. Zix focuses on email security, encryption, and data loss prevention (DLP) for regulated industries, while Splunk provides a broad machine-data intelligence platform used for security, IT operations, and observability. This article compares the two companies across key financial and market metrics as reported in mid-2019.

Earnings and Valuation

The table below summarises gross revenue (in millions), Price/Sales ratio, Earnings Per Share (EPS), and Price/Earnings ratio for both companies.

Splunk’s significantly higher revenue reflects its larger scale and broader market reach. However, Splunk reported a negative EPS of -2.11 at the time, indicating the company was still investing heavily in growth at the expense of near-term profitability — a common pattern among high-growth SaaS companies. Zix, by contrast, posted a positive EPS of 0.09, though its P/E ratio of 103.52 indicates the market priced in significant future growth relative to current earnings.

Profitability

Return on equity (ROE) and return on assets (ROA) provide insight into how efficiently each company uses its capital.

Both companies reported 0% net margins at this snapshot date. Zix showed a positive ROE of 9.2% and ROA of 2.8%, suggesting it was generating some return for shareholders from its asset base. Splunk’s 0% on both metrics reflects its then-negative earnings position. Neither figure indicates strong near-term profitability, which is typical for software companies in aggressive growth phases.

Volatility and Risk

Beta is a measure of a stock’s price volatility relative to the broader market (S&P 500, where beta = 1.0).

• Zix Corporation had a beta of 0.88, meaning it was approximately 12% less volatile than the S&P 500 at the time — a relatively stable profile for a small-cap software company.
• Splunk Inc. had a beta of 2.02, making it approximately twice as volatile as the broader market. This is consistent with high-growth, high-valuation software stocks that can experience large price swings in response to earnings reports or macro sentiment shifts.

Liquidity

Current and Quick ratios measure a company’s ability to meet short-term obligations. A ratio above 1.0 generally indicates sufficient liquidity.

• Zix Corporation: Current Ratio of 0.4, Quick Ratio of 0.4 — both below 1.0, indicating potential short-term liquidity constraints.
• Splunk Inc.: Current Ratio of 3.2, Quick Ratio of 3.2 — well above 1.0, reflecting a strong liquidity position, likely supported by substantial cash raised through equity offerings and revenue growth.

Splunk’s significantly stronger liquidity ratios suggest it was better positioned to meet near-term financial obligations at the time of this analysis.

Analyst Recommendations

Both companies carried predominantly bullish analyst sentiment. Zix had a unanimous 2-analyst buy consensus with a price target of $10.50 and implied upside of approximately 29.47% from the then-current price. Splunk attracted far more analyst coverage — 22 buy ratings out of 26 total — with an average price target of $153.27 and implied upside of approximately 17.74%.

While Zix showed a higher percentage upside based on consensus targets, Splunk’s breadth of analyst coverage and absolute buy-rating count reflects far greater institutional interest and liquidity.

Insider and Institutional Ownership

• Zix Corporation: 76.8% institutional ownership; 3.3% insider ownership.
• Splunk Inc.: 94.8% institutional ownership; 0.9% insider ownership.

Splunk’s higher institutional ownership is consistent with its larger market capitalisation and inclusion in major indices and fund mandates. Zix’s higher insider ownership percentage may reflect greater alignment between management and shareholders, though the absolute number of shares held by insiders is much smaller.

Stock Performance (as of mid-2019)

Over the trailing year and YTD periods shown, Zix Corporation significantly outperformed Splunk in price appreciation. Zix’s 70.6% one-year gain versus Splunk’s 41.86% demonstrates that smaller-cap stocks can produce outsized returns in bullish conditions, though typically with higher risk. Both stocks delivered strong absolute returns during this period, reflecting broader strength in cloud and software equities in 2019.

Company Profiles

Zix Corporation

Founded in 1983 (formerly ZixIt Corporation, renamed in 2002) and headquartered in Dallas, Texas, Zix Corporation provides email encryption, data loss prevention, and mobile email security solutions. Its primary customers are in regulated industries including healthcare, financial services, insurance, and government.

Core products at the time of writing included:

• Zix Email Encryption: Policy-driven email encryption to meet regulatory compliance requirements.
• ZixGateway: Automatic encryption and decryption of messages containing sensitive content.
• ZixDirectory: A shared identity community enabling encrypted email delivery across organisations.
• Best Method of Delivery: A patented system that selects the optimal encryption delivery method based on sender and recipient environment.
• ZixQuarantine: An email-specific DLP solution designed for rapid deployment.
• ZixOne: A mobile email application that provides access to corporate email without persistently storing data on the device, reducing exposure from device loss or theft.

Zix distributes its products through a direct sales force and a network of resellers and channel partners.

Splunk Inc.

Incorporated in 2003 and headquartered in San Francisco, California, Splunk provides a machine data intelligence platform used globally by organisations across many industries for security, IT operations, and business analytics.

Key products and capabilities at the time included:

• Splunk Enterprise: The core on-premises platform for collecting, indexing, searching, monitoring, and analysing machine data from any source or format.
• Splunk Cloud: A fully managed cloud-delivered version of Splunk Enterprise.
• Splunk Light: A simplified log search and analysis product for small IT environments.
• Splunk Enterprise Security (ES): A SIEM solution for detecting and responding to emerging security threats.
• Splunk User Behavior Analytics (UBA): Machine-learning-based detection of insider threats and advanced cyber-attacks.
• Splunk IT Service Intelligence (ITSI): Monitoring of IT service health and key performance indicators.
• Splunk Analytics for Hadoop: Integration with Hadoop and Amazon S3 for large-scale data exploration.
• Splunkbase and Splunk Answers: Community platforms for sharing apps, integrations, and support.

Splunk serves a wide range of verticals including financial services, government, healthcare, retail, telecommunications, and technology.

Summary

As of mid-2019, Zix Corporation presented a more favourable picture on several traditional financial metrics — positive EPS, higher ROE and ROA, stronger stock price momentum, and a higher analyst-implied upside percentage. Splunk, however, offered far superior liquidity, substantially greater revenue scale, deeper analyst coverage, and higher institutional ownership — all indicators of a more mature and closely followed public company.

The two companies are not direct competitors in a practical sense: Zix’s niche is email security for regulated industries, while Splunk addresses a much broader data intelligence and security analytics market. Investors and practitioners evaluating either company should consult current financial data, as conditions have changed significantly since 2019.

Note: All data in this article reflects figures available as of August 2019. This article is not investment advice.

Overview

TFS Financial Corporation (NASDAQ: TFSL) and Old Second Bancorp Inc. (NASDAQ: OSBC) are both participants in the Regional – Midwest Banks sector. Despite operating in the same regional banking space, the two companies present notably different financial profiles across valuation, profitability, risk, dividends, analyst coverage, and share ownership. This article breaks down those differences across each dimension to give investors a clear, side-by-side picture.

Valuation and Earnings

The table below compares gross revenue, price-to-sales ratio, net income, earnings per share (EPS), and price-to-earnings (P/E) ratio for both companies.

TFSL generates significantly higher gross revenue than OSBC, but OSBC delivers a higher EPS ($1.09 vs. $0.30). This apparent paradox is explained by share count: TFSL has a much larger share base, which dilutes per-share earnings. TFSL also trades at a substantially higher P/E ratio (56.63 vs. 11.81), making it the more expensive stock by that measure. OSBC’s lower price-to-sales ratio of 3.01 compared to TFSL’s 15.86 further reinforces that OSBC is valued more conservatively relative to its revenue.

Profitability

The profitability comparison covers net margins, return on equity (ROE), and return on assets (ROA).

Net margins are nearly identical between the two companies (roughly 26.7%). However, OSBC demonstrates meaningfully stronger capital efficiency. Its ROE of 14.7% is more than three times that of TFSL’s 4.7%, and its ROA of 1.2% is double TFSL’s 0.6%. These metrics suggest OSBC is generating more profit per dollar of equity and assets — a sign of stronger operational efficiency relative to its balance sheet size.

Volatility and Risk

Beta is a common measure of a stock’s price volatility relative to the broader market (S&P 500). A beta below 1.0 indicates lower volatility than the market.

• TFS Financial Corporation (TFSL): Beta of 0.21, indicating approximately 79% less volatility than the S&P 500. TFSL is a relatively stable, low-movement stock.
• Old Second Bancorp Inc. (OSBC): Beta of 0.96, indicating price movement very close to the broader market — approximately 4% less volatile than the S&P 500.

TFSL’s very low beta may reflect its mutual holding company structure and conservative lending focus, which tend to insulate the stock from broader market swings.

Dividends

• TFS Financial Corporation (TFSL): Annual dividend of $0.92 per share, representing a dividend yield of approximately 5.17%.
• Old Second Bancorp Inc. (OSBC): Annual dividend of $0.04 per share, representing a dividend yield of approximately 0.31%.

TFSL offers a substantially higher dividend yield, which may appeal to income-focused investors. OSBC’s minimal dividend suggests the company prioritizes retaining capital for growth or balance sheet strength over returning cash to shareholders.

Analyst Ratings

TFSL carries no active analyst coverage at the time of this comparison, which is not uncommon for companies with a mutual holding company structure and limited institutional trading interest. OSBC holds one Buy rating, with an analyst price target of $15.00 — implying a potential upside of approximately 21.16% from the price at the time of writing.

Institutional and Insider Ownership

• TFS Financial Corporation (TFSL): Institutional ownership at approximately 93%; insider ownership at roughly 0.3%.
• Old Second Bancorp Inc. (OSBC): Institutional ownership at approximately 67.6%; insider ownership at roughly 2.6%.

TFSL’s very high institutional ownership reflects the fact that most of its public float is held by large asset managers, pension funds, and similar entities. OSBC’s higher insider ownership (2.6% vs. 0.3%) can be interpreted as a sign that management has meaningful skin in the game, which is often viewed favorably by investors aligned with long-term value creation.

Price Performance

The table below shows rolling price performance across multiple timeframes as of late June 2019.

TFSL showed positive price momentum across all measured timeframes, with a one-year gain of approximately 14.32%. OSBC, by contrast, posted negative returns across the same periods, declining roughly 11.75% over the prior year. This divergence in price trend — TFSL bullish, OSBC bearish — is a significant contrast given their similar net margin profiles.

Company Background: TFS Financial Corporation

TFS Financial Corporation is the holding company for Third Federal Savings and Loan Association of Cleveland, one of the largest thrift institutions in the United States. The company focuses primarily on residential real estate mortgage loans and retail savings deposits. Its product lines include:

• Savings accounts, checking accounts, certificates of deposit, IRAs, and other qualified plan accounts
• Residential real estate mortgage loans, residential construction loans, and home equity loans and lines of credit
• Net lease transactions on commercial buildings
• Escrow and settlement services
• Reinsurance of private mortgage insurance on residential mortgage loans

The company operates through its main office in Cleveland, Ohio, along with 38 full-service branches and 8 loan production offices across Ohio and Florida. Founded in 1938 and headquartered in Cleveland, TFS Financial Corporation is a subsidiary of Third Federal Savings and Loan Association of Cleveland, MHC.

Summary

These two Midwest regional banks offer contrasting investment profiles. TFSL is a large, low-volatility thrift with high institutional ownership, a strong dividend yield, and positive price momentum — but trades at a premium valuation and shows weaker capital efficiency. OSBC is a smaller community bank with stronger ROE and ROA, more competitive valuation multiples, and meaningful insider ownership, but has experienced negative price momentum and offers a minimal dividend. Investors should weigh these factors alongside their own risk tolerance and investment objectives, and consult current financial data before making any decisions.

All financial data cited in this article is sourced from stocksbeat.com and reflects figures available as of June 2019. This article is for informational purposes only and does not constitute investment advice.