eGain (EGAN) AI Stock Analysis

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eGain

(NASDAQ:EGAN)

Rating:69Neutral

Price Target:

$6.50

▲(13.44%Upside)

eGain's overall stock score of 69 reflects a mix of strengths in technical analysis and financial stability, countered by high valuation concerns and neutral earnings sentiment. The company's ability to overcome revenue and cash flow challenges will be key to improving its stock performance.

eGain (EGAN) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$156.72M

Dividend YieldN/A

Average Volume (3M)50.65K

Price to Earnings (P/E)58.8

Beta (1Y)0.78

Revenue Growth-7.70%

EPS Growth-64.90%

CountryUS

Employees539

SectorTechnology

Sector Strength83

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.03

Shares Outstanding27,350,693

10 Day Avg. Volume61,465

30 Day Avg. Volume50,649

Financial Highlights & Ratios

PEG Ratio-2.84

Price to Book (P/B)3.12

Price to Sales (P/S)0.00

P/FCF Ratio79.92

Enterprise Value/Market Cap0.59

Enterprise Value/Revenue0.26

Enterprise Value/Gross Profit1.51

Enterprise Value/Ebitda3.73

Forecast

1Y Price Target

$8.00

Price Target Upside39.62% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

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: 13.24%|

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 demonstrates strong gross profit margins and a solid balance sheet with low leverage. However, challenges in revenue growth and negative cash flow metrics signal potential financial pressure. Improvements in operational efficiency and cash flow are necessary for better performance.

Income Statement

Positive

eGain's TTM (Trailing-Twelve-Months) gross profit margin stands strong at 69.2%, showcasing effective cost management. However, the net profit margin of 5.95% indicates room for improvement in operational efficiency. The revenue declined by 4.1% from the previous year, suggesting challenges in maintaining growth. The EBIT and EBITDA margins are moderate at 3.7% and 5.4%, respectively, indicating potential for higher earnings with operational optimizations.

Balance Sheet

Positive

The company's debt-to-equity ratio is low at 0.07, indicating a strong equity position with minimal reliance on debt. The return on equity (ROE) is modest at 9.58%, reflecting moderate profitability. With an equity ratio of 49.7%, eGain maintains a solid balance of assets financed by equity, ensuring financial stability.

Cash Flow

Positive

The free cash flow growth rate is negative, reflecting a decrease in cash generation capabilities. The operating cash flow to net income ratio is negative, indicating challenges in converting profits into cash. The free cash flow to net income ratio is also negative, signaling potential liquidity issues. These metrics highlight the need for improved cash management strategies.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
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
	EBIT
2.38M	5.97M	1.39M	-2.14M	5.25M	5.29M
	EBITDA
4.61M	5.97M	1.39M	-614.00K	7.34M	7.41M
	Net Income Common Stockholders
3.40M	7.78M	2.11M	-2.44M	6.96M	7.21M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
68.74M	70.00M	73.20M	72.17M	63.23M	46.61M
	Total Assets
106.22M	127.85M	130.12M	126.01M	114.56M	93.70M
	Total Debt
3.80M	3.77M	2.59M	3.58M	2.26M	3.14M
	Net Debt
-64.94M	-66.23M	-70.61M	-68.59M	-60.97M	-43.47M
	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
1.96M	12.26M	4.33M	7.49M	13.46M	13.54M
	Operating Cash Flow
2.26M	12.45M	4.62M	8.12M	13.86M	14.06M
	Investing Cash Flow
-297.00K	-198.00K	-288.00K	-628.00K	-402.00K	-514.00K
	Financing Cash Flow
-14.04M	-15.39M	-4.08M	3.33M	2.35M	1.41M

eGain Technical Analysis

Technical Analysis Sentiment

Positive

Last Price5.73

Price Trends

50DMA

5.06

Positive

100DMA

5.32

Positive

200DMA

5.45

Positive

Market Momentum

MACD

0.18

Negative

RSI

59.04

Neutral

STOCH

73.46

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 5.73 is above the 20-day moving average (MA) of 5.41, above the 50-day MA of 5.06, and above the 200-day MA of 5.45, indicating a bullish trend. The MACD of 0.18 indicates Negative momentum. The RSI at 59.04 is Neutral, neither overbought nor oversold. The STOCH value of 73.46 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EGAN	69 Neutral	$156.72M	58.83	5.01%	―	-7.70%	-64.90%
Sector *	62 Neutral	$11.81B	10.34	-7.44%	2.91%	7.41%	-7.93%
EGHT	51 Neutral	$243.41M	―	-24.28%	―	-2.23%	19.48%
LPSN	47 Neutral	$73.51M	―	-137.76%	―	-23.04%	11.60%
OCFT	47 Neutral	$286.24M	50.30	-24.43%	―	-45.80%	-13.09%
NUKK		$74.19M	0.77		―	―	―
ONTF	56 Neutral	$234.89M	―	-24.47%	―	-8.39%	7.79%

* Technology Sector Average

Performance Comparison

EGAN

eGain

5.73

-0.45

-7.28%

EGHT

8X8

1.81

-0.72

-28.46%

LPSN

Liveperson

0.78

0.17

27.87%

OCFT

OneConnect Financial Technology

7.14

5.22

271.88%

NUKK

Nukkleus

13.84

7.33

112.60%

ONTF

ON24

5.53

-0.09

-1.60%

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

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.