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eGain Communications Corporation (EGAN)
NASDAQ:EGAN
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eGain
(NASDAQ:EGAN)
Rating:71Outperform
Price Target:
$7.00
▲(2.94%Upside)
eGain (EGAN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$189.27M
Dividend YieldN/A
Average Volume (3M)65.88K
Price to Earnings (P/E)69.8
Beta (1Y)0.73
Revenue Growth-7.70%
EPS Growth-64.90%
CountryUS
Employees539
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.03
Shares Outstanding27,350,693
10 Day Avg. Volume70,513
30 Day Avg. Volume65,880
Financial Highlights & Ratios
PEG Ratio-3.73
Price to Book (P/B)3.49
Price to Sales (P/S)0.00
P/FCF Ratio43.11
Enterprise Value/Market Cap0.58
Enterprise Value/Revenue0.31
Enterprise Value/Gross Profit1.82
Enterprise Value/Ebitda4.91
Forecast
1Y Price Target
$7.83Price Target Upside15.15% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
eGain Business Overview & Revenue Model
Company DescriptioneGain 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, augment, and orchestrate customer engagement. It also offers subscription services that provides customers with access to its software on a cloud-based platform; and professional services, such as consulting, implementation, and training services. It serves customers in various industry sectors, including the financial services, telecommunications, retail, government, healthcare, and utilities. The company was incorporated in 1997 and is headquartered in Sunnyvale, California.
How the Company Makes MoneyeGain generates revenue primarily through licensing its software solutions and providing related services. The company's main revenue streams include subscription fees for its cloud-based services, perpetual software license fees, and maintenance and support fees. eGain also earns money from professional services such as implementation, consulting, and training to help clients maximize the value of their customer engagement solutions. Key factors contributing to eGain's earnings include its ability to retain and expand existing customer accounts, acquire new clients, and maintain strategic partnerships with technology providers and system integrators.
eGain Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q3-2025)
| % Change Since: 34.39%|
Next Earnings Date:Sep 04, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with significant achievements such as securing a major deal with a US mega bank and launching a new AI product, offset by challenges like a decline in revenue and extended sales cycles. The overall sentiment is neutral as the highlights and lowlights are evenly balanced.Q3-2025 Updates
Positive Updates
Mega Bank Deal Secured
eGain secured one of its largest deals ever with a US mega bank, expanding its AI knowledge platform to over 100,000 users across more than half the bank.
Launch of AI Agent for Contact Center
eGain launched a new AI Agent for Contact Centers, which is seeing strong customer interest and is already being rolled out by a banking client.
Gartner Recognition
eGain was rated a leader in Gartner's emerging market quadrant for generative AI knowledge management apps.
Profitability Exceeded Projections
The company exceeded its profitability projections and delivered solid operating cash flow.
Increased R&D Investment
R&D spending increased by 15% year-over-year to support product innovation and capitalize on emerging market opportunities.
Negative Updates
Revenue Decline
Total revenue for the third quarter was $21 million, down 6% year-over-year due to the loss of two large clients last year.
Extended Sales Cycles
Bookings were impacted by extended sales cycles, with sales cycles now averaging nine to twelve months.
Decline in SaaS Gross Margins
SaaS gross margin for the quarter was 77%, down from 78% a year ago, and total gross margin was 69%, down from 71% a year ago.
Net Income Decline
Non-GAAP net income was $765,000 or $0.03 per share, down from $2.6 million or $0.08 per share in the year-ago quarter.
Revised Downward Revenue Guidance
The company revised its full-year revenue guidance down to $88 million to $88.5 million from an original range of $88.5 million to $90 million.
Company Guidance
In the eGain Fiscal 2025 Third Quarter Financial Results Conference Call, the company provided several key metrics and guidance for the future. During the third quarter, eGain reported total revenue of $21 million, which was a 6% decline year-over-year, primarily due to the loss of two large clients in the previous year. SaaS revenue accounted for 93% of the total revenue, with the remainder coming from professional services. The company achieved a non-GAAP net income of $765,000 or $0.03 per share, surpassing the high-end of their guidance range. For Q4, eGain expects total revenue between $22.8 million to $23.3 million and a non-GAAP net income of $1.7 million to $2.2 million or $0.06 to $0.08 per share. For the full fiscal year 2025, eGain revised its revenue guidance to between $88 million to $88.5 million, slightly down from the original range, but raised its GAAP net income guidance to $2.5 million to $3 million or $0.09 to $0.10 per share. The company highlighted a significant expansion deal with a US mega bank, which is expected to positively impact SaaS ARR and contribute to sequential revenue growth into fiscal 2026.eGain Financial Statement Overview
Summary
eGain shows strong gross margins and low leverage. However, it faces challenges in revenue growth and profitability, alongside a significant decline in free cash flow. The balance sheet reflects a strong equity position with low debt, supporting financial stability.Income Statement
The company's gross profit margin for TTM is strong at 69.22%, indicating efficient production. However, the net profit margin has declined to 3.30%, reflecting increased expenses or reduced income. Revenue has decreased by 5.54% compared to the previous year, suggesting challenges in sales growth. The EBIT margin has improved from previous years but remains modest at 2.71%, while the EBITDA margin is healthier at 4.34%.68
Positive
Balance Sheet
The debt-to-equity ratio is low at 0.07, indicating low financial leverage and risk. Return on equity (ROE) is modest at 5.61%, suggesting moderate profitability relative to shareholder's equity. The equity ratio stands at 48.54%, reflecting a balanced capital structure with significant equity financing.75
Positive
Cash Flow
Free cash flow has decreased significantly by 66.82%, indicating potential challenges in generating cash after capital expenditures. The operating cash flow to net income ratio is strong at 1.54, suggesting efficient cash generation from operations. The free cash flow to net income ratio is robust at 1.40, indicating good conversion of net income into free cash flow.72
Positive
| Breakdown | TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 87.66M | 92.80M | 98.01M | 91.95M | 78.29M | 72.73M |
| Gross Profit | 60.68M | 65.21M | 70.70M | 67.41M | 59.02M | 51.65M |
| EBITDA | 3.80M | 7.46M | 3.02M | -614.00K | 9.43M | 9.52M |
| Net Income | 2.90M | 7.78M | 2.11M | -2.44M | 6.96M | 7.21M |
Balance Sheet | ||||||
| Total Assets | 106.22M | 127.85M | 130.12M | 126.01M | 114.56M | 93.70M |
| Cash, Cash Equivalents and Short-Term Investments | 68.74M | 70.00M | 73.20M | 72.17M | 63.23M | 46.61M |
| Total Debt | 3.80M | 3.77M | 2.59M | 3.58M | 2.26M | 3.14M |
| Total Liabilities | 54.63M | 69.36M | 68.42M | 69.15M | 68.50M | 59.06M |
| Stockholders Equity | 51.59M | 58.50M | 61.70M | 56.86M | 46.06M | 34.64M |
Cash Flow | ||||||
| Free Cash Flow | 4.07M | 12.26M | 4.33M | 7.49M | 13.46M | 13.54M |
| Operating Cash Flow | 4.47M | 12.45M | 4.62M | 8.12M | 13.86M | 14.06M |
| Investing Cash Flow | -401.00K | -198.00K | -288.00K | -628.00K | -402.00K | -514.00K |
| Financing Cash Flow | -19.03M | -15.39M | -4.08M | 3.33M | 2.35M | 1.41M |
eGain Technical Analysis
Positive
6.80
Price Trends
5.72
Positive
5.31
Positive
5.45
Positive
Market Momentum
0.31
Negative
66.74
Neutral
79.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGAN, the sentiment is Positive. The current price of 6.8 is above the 20-day moving average (MA) of 6.36, above the 50-day MA of 5.72, and above the 200-day MA of 5.45, indicating a bullish trend. The MACD of 0.31 indicates Negative momentum. The RSI at 66.74 is Neutral, neither overbought nor oversold. The STOCH value of 79.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EGAN.
eGain Risk Analysis
eGain disclosed 38 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
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $189.27M | 69.82 | 5.01% | ― | -7.70% | -64.90% | |
71 Outperform | $278.29M | ― | -24.28% | ― | -1.87% | 61.90% | |
58 Neutral | $229.37M | ― | -24.47% | ― | -8.39% | 7.79% | |
56 Neutral | HK$13.71B | 5.12 | -5.75% | 5.43% | 9.34% | -42.23% | |
47 Neutral | $281.69M | 50.30 | -24.43% | ― | -45.80% | -13.09% | |
45 Neutral | $101.36M | ― | -137.76% | ― | -23.04% | 11.60% | |
| $55.86M | 0.54 | ― | ― | ― |
* Technology Sector Average
Performance Comparison
EGAN
eGain
6.80
0.75
12.40%
EGHT
8X8
2.14
-0.07
-3.17%
LPSN
Liveperson
1.05
0.31
41.89%
OCFT
OneConnect Financial Technology
7.45
5.63
309.34%
NUKK
Nukkleus
9.70
6.75
228.81%
ONTF
ON24
5.36
-0.48
-8.22%
eGain Corporate Events
Executive/Board Changes
eGain Approves CEO Compensation and Executive Stock Options
Neutral
Dec 12, 2024
eGain Corporation’s Board approved a variable annual cash compensation of $60,000 for CEO Ashutosh Roy for fiscal year 2024, without altering his base salary. Additionally, stock options were granted to key executives, priced at $5.71 per share, vesting in September 2025, potentially impacting executive retention and motivation.
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.