eGain Communications Corporation (EGAN)
NASDAQ:EGAN
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eGain
(NASDAQ:EGAN)
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Rating:66Neutral
Price Target:
$7.50
▼(-7.75% Downside)
Action:Reiterated
Date:05/15/26
The score is driven primarily by solid financial fundamentals (strong margins and minimal leverage) and a constructive earnings update highlighting accelerating AI-related ARR and improved retention/profitability. This is tempered by weak technicals (price below key moving averages with negative MACD) and a key financial risk around earnings quality/cash-flow conversion alongside recent free-cash-flow decline.
Positive Factors
AI Knowledge ARR Growth & SaaS Mix
Sustained ARR growth in the AI Knowledge product and a 93% SaaS revenue mix signal durable recurring revenue and expansion potential. Strong ARR and high subscription share improve predictability, support higher lifetime value, and enable scalable upsell/expansion inside enterprise accounts over quarters.
Negative Factors
Cash-Flow Conversion / Earnings Quality
Net income has outpaced operating cash flow, and free cash flow has fallen materially, indicating potential working-capital timing or one-time accounting effects. Over several quarters this weak conversion can mask unsustainable earnings, constrain reinvestment, and raise volatility in shareholder returns.
Read all positive and negative factors
Positive Factors
Negative Factors
AI Knowledge ARR Growth & SaaS Mix
Sustained ARR growth in the AI Knowledge product and a 93% SaaS revenue mix signal durable recurring revenue and expansion potential. Strong ARR and high subscription share improve predictability, support higher lifetime value, and enable scalable upsell/expansion inside enterprise accounts over quarters.
Read all positive factors
eGain Key Performance Indicators (KPIs)
eGain (EGAN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$178.15M
Dividend YieldN/A
Average Volume (3M)157.17K
Price to Earnings (P/E)22.2
Beta (1Y)0.78
Revenue Growth5.20%
EPS Growth1319.56%
CountryUS
Employees539
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.41
Shares Outstanding27,450,080
10 Day Avg. Volume164,960
30 Day Avg. Volume157,174
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)2.18
Price to Sales (P/S)1.99
P/FCF Ratio37.46
Enterprise Value/Market Cap0.57
Enterprise Value/Revenue1.09
Enterprise Value/Gross Profit1.49
Enterprise Value/Ebitda7.33
Forecast
1Y Price Target
$10.50Price Target Upside29.15% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)0.4
Revenue Forecast (FY)$91.22M
eGain Business Overview & Revenue Model
Company Description
eGain Corporation develops, licenses, implements, and supports customer service infrastructure software solutions in North America, Europe, the Middle East, Africa, and the Asia Pacific. It provides unified cloud software solutions to automate, au...
How the Company Makes Money
eGain makes money primarily by selling access to its customer engagement software platform under subscription-based software-as-a-service (SaaS) and term-based licensing arrangements, typically priced per user/agent seat, usage, or other contracte...
eGain Earnings Call Summary
Earnings Call Date:May 14, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Sep 03, 2026
Earnings Call Sentiment Positive
The call highlights strong momentum in the AI Knowledge business with clear improvements in ARR growth (AI Knowledge ARR +26% YoY), profitability (non‑GAAP net income up to $3.2M, adjusted EBITDA margin 14%), margin expansion, healthy cash generation (YTD CFO $18.7M, cash $80.5M) and significant customer/partner traction (partner-sourced opportunities +67%, RFP activity roughly doubled). Near-term headwinds are largely timing and one-off: a single EMEA on‑prem customer termination (~$1.6M ARR), the impact of sunsetting noncore messaging (~$600k), seasonality (Q3 softer, Q4 guidance slightly lower than Q3) and longer sales cycles for larger deals. Overall the positives — broad ARR and retention strength, product launches and a strong balance sheet — materially outweigh these localized/near-term negatives.Positive Updates
Revenue Growth and SaaS Mix
Total Q3 revenue of $22.5M, up 7% year-over-year; SaaS represented 93% of revenue. Excluding ~ $600k quarterly impact from noncore messaging products being sunset, total revenue and SaaS revenue would have grown ~13% and ~14% YoY, respectively. Q3 was impacted by ~ $450k due to two fewer days in the quarter.
Negative Updates
One-off EMEA Customer Termination
One on‑premise subscription customer in EMEA chose not to migrate to the cloud, terminating an agreement that reduced total SaaS ARR by approximately $1.6M; roughly $900k of that was AI Knowledge ARR. Management views this as a one‑off driven by country restrictions on cloud services.
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Q3-2026 Updates
Positive
Negative
Revenue Growth and SaaS Mix
Total Q3 revenue of $22.5M, up 7% year-over-year; SaaS represented 93% of revenue. Excluding ~ $600k quarterly impact from noncore messaging products being sunset, total revenue and SaaS revenue would have grown ~13% and ~14% YoY, respectively. Q3 was impacted by ~ $450k due to two fewer days in the quarter.
Read all positive updates
Company Guidance
The company guided Q4 FY2026 revenue of $21.5M–$22.0M; GAAP net income of -$0.3M to $0.4M (‑$0.01 to $0.01 per share), which includes about $0.9M of stock‑based compensation; non‑GAAP net income of $0.6M–$1.3M ($0.02–$0.05 per share); and adjusted EBITDA of $0.5M–$1.0M (about 2%–5%). For the full fiscal year ending June 30, 2026, management expects total revenue of $90.5M–$91.0M, GAAP net income of $7.0M–$7.8M ($0.25–$0.28 per share) (including ~$2.9M stock‑based comp and ~$1.4M warrant expense), non‑GAAP net income of $11.3M–$12.1M ($0.39–$0.42 per share), and adjusted EBITDA of $11.9M–$12.4M (roughly a 13% margin); weighted average shares outstanding are expected to be ~28M for both Q4 and the full year. They also reiterated longer‑term modeling assumptions such as R&D running toward ~30% of revenue as they invest for growth.eGain Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
86
Very Positive
Cash Flow
63
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 92.22M | 88.43M | 92.80M | 98.01M | 91.95M | 78.29M |
| Gross Profit | 67.59M | 62.01M | 65.21M | 70.70M | 67.41M | 59.02M |
| EBITDA | 13.75M | 5.98M | 7.46M | 3.02M | -614.00K | 9.43M |
| Net Income | 38.44M | 32.25M | 7.78M | 2.11M | -2.44M | 6.96M |
Balance Sheet | ||||||
| Total Assets | 139.69M | 148.33M | 128.34M | 130.12M | 126.90M | 114.56M |
| Cash, Cash Equivalents and Short-Term Investments | 80.46M | 62.92M | 70.01M | 73.20M | 72.18M | 63.23M |
| Total Debt | 3.13M | 3.67M | 3.77M | 2.59M | 3.58M | 2.26M |
| Total Liabilities | 48.13M | 67.60M | 69.83M | 68.42M | 69.94M | 68.50M |
| Stockholders Equity | 91.56M | 80.73M | 58.52M | 61.70M | 56.95M | 46.06M |
Cash Flow | ||||||
| Free Cash Flow | 13.67M | 4.70M | 12.26M | 4.33M | 7.49M | 13.46M |
| Operating Cash Flow | 14.41M | 5.26M | 12.45M | 4.62M | 8.12M | 13.86M |
| Investing Cash Flow | -735.00K | -565.00K | -198.00K | -288.00K | -628.00K | -402.00K |
| Financing Cash Flow | -2.02M | -14.39M | -15.39M | -4.08M | 3.33M | 2.35M |
eGain Technical Analysis
Neutral
8.13
Price Trends
8.80
Negative
9.60
Negative
9.42
Negative
Market Momentum
-0.30
Negative
49.27
Neutral
76.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGAN, the sentiment is Neutral. The current price of 8.13 is above the 20-day moving average (MA) of 7.88, below the 50-day MA of 8.80, and below the 200-day MA of 9.42, indicating a neutral trend. The MACD of -0.30 indicates Negative momentum. The RSI at 49.27 is Neutral, neither overbought nor oversold. The STOCH value of 76.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EGAN.
eGain Risk Analysis
eGain disclosed 39 risk factors in its most recent earnings report. eGain reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
eGain Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $662.13M | 27.98 | 13.98% | ― | 18.07% | 60.39% | |
69 Neutral | $605.23M | 42.06 | 9.69% | ― | 8.25% | -99.84% | |
67 Neutral | $375.91M | -13.43 | -19.29% | ― | 12.27% | 37.41% | |
66 Neutral | $178.15M | 22.20 | 44.62% | ― | 5.20% | 1319.56% | |
64 Neutral | $1.20B | 69.87 | 3.93% | ― | 7.64% | -80.72% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
EGAN
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.