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Eplus Inc. (PLUS)
NASDAQ:PLUS

Eplus (PLUS) AI Stock Analysis

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Eplus

(NASDAQ:PLUS)

Rating:61Neutral
Price Target:
Eplus has demonstrated strong growth in revenue and operational efficiency, but faces challenges with liquidity, flat overall revenue, and declining adjusted EBITDA. Technical indicators suggest a bearish trend, while valuation is moderate. The earnings call highlighted mixed results, emphasizing strengths in service growth but also difficulties with expenses and net earnings.

Eplus (PLUS) vs. SPDR S&P 500 ETF (SPY)

Eplus Business Overview & Revenue Model

Company DescriptionePlus inc., together with its subsidiaries, provides information technology (IT) solutions that enable organizations to optimize their IT environment and supply chain processes in the United States and internationally. It operates in two segments, Technology and Financing. The Technology segment offers hardware, perpetual and subscription software, maintenance, software assurance, and internally provided and outsourced services; and professional and managed services, including managed, professional, security solutions, cloud consulting and hosting, staff augmentation, server and desktop support, and project management services. The Financing segment engages in financing arrangements, such as sales-type and operating leases; loans and consumption-based financing arrangements; and underwriting, management, and disposal of IT equipment and assets. Its financing operations comprise sales, pricing, credit, contracts, accounting, risk management, and asset management. This segment primarily finances IT, communication-related, and medical equipment; and industrial machinery and equipment, office furniture and general office equipment, transportation equipment, and other general business equipment directly, as well as through vendors. ePlus inc. serves commercial entities, state and local governments, government contractors, and educational institutions. The company was formerly known as MLC Holdings, Inc. and changed its name to ePlus inc. in 1999. ePlus inc. was founded in 1990 and is headquartered in Herndon, Virginia.
How the Company Makes MoneyEplus generates revenue through multiple streams primarily centered around its mobile network services. The company earns income by offering prepaid and postpaid mobile plans, which include voice, text, and data services. Subscription fees from these plans form a significant portion of their revenue. Additionally, Eplus capitalizes on value-added services such as mobile internet, entertainment packages, and roaming services. The company may also engage in strategic partnerships with handset manufacturers and content providers to boost its service offerings and attract more customers. Furthermore, Eplus could derive revenue from wholesale arrangements, providing network access to mobile virtual network operators (MVNOs).

Eplus Earnings Call Summary

Earnings Call Date:May 22, 2025
(Q4-2025)
|
% Change Since: 7.84%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant growth in services and margin expansion, but faced challenges with declining net and product sales, and specific segment weaknesses. The company's strategic focus on high-growth areas such as AI and security is promising, yet economic uncertainties and product sales declines present ongoing challenges.
Q4-2025 Updates
Positive Updates
Gross Profit and Margin Expansion
Gross profit rose by nearly 12% and gross margin expanded 580 basis points year-over-year to 29.3% in the fourth quarter.
Rapid Growth in Services Revenue
Services revenue increased 33% in the quarter and 37% for the year, highlighting a successful shift towards services-led solutions.
Record Cash Position
Exited the year with a record cash position of approximately $389 million, providing a strong foundation for strategic investments.
NVIDIA DGX Specializations
ePlus achieved NVIDIA DGX Ready SuperPOD specialization and DGX Ready managed service provider specializations, demonstrating expertise in AI infrastructure deployments.
Strong Balance Sheet
Stockholders' equity was $977.6 million, up from $901.8 million at the end of fiscal 2024.
Negative Updates
Decline in Net Sales
Q4 net sales declined 10.2% year-over-year, primarily due to a reduction in product sales amid economic uncertainty.
Decreased Product Sales
Technology business net sales declined 10.4% year-over-year to $487.2 million, reflecting lower product sales.
Operating Income Decline
Operating income for the full year was $141.4 million, down from $158.3 million a year ago, due to lower product sales and increased operating expenses.
Challenges in Networking Segment
Networking was down significantly year-over-year, indicating ongoing challenges in this segment.
Company Guidance
During the ePlus Fourth Quarter and Full Year 2025 Earnings Results Conference Call, the company provided guidance for fiscal year 2026, indicating expectations for low single-digit growth in net sales and mid-single-digit growth in both gross profit and adjusted EBITDA. This guidance reflects a cautious optimism amid economic uncertainty, but does not assume recessionary conditions. In fiscal year 2025, ePlus experienced a 10.2% year-over-year decline in Q4 net sales, primarily due to reduced product sales and a challenging prior-year comparison. However, gross profit increased nearly 12% and gross margin expanded 580 basis points to 29.3%. Services revenue saw significant growth, with a 33% increase for the quarter and 37% for the year, while managed services grew by 16.6% for the quarter and 24.6% for the year. The company emphasized its strong cash position of approximately $389 million and its strategic focus on AI, cloud, security, and networking to drive future growth.

Eplus Financial Statement Overview

Summary
Eplus exhibits strong revenue growth and operational efficiency, although concerns over the negative gross profit margin in the TTM period and liquidity challenges need attention. Cash flow generation is robust, but historical volatility in operating cash flow requires monitoring.
Income Statement
65
Positive
Eplus has demonstrated consistent revenue growth over the years, with a notable increase from 2023 to the TTM (Trailing-Twelve-Months). The EBIT and EBITDA margins have also remained stable, indicating operational efficiency. However, the negative gross profit margin in the TTM period is concerning and needs to be addressed to maintain profitability.
Balance Sheet
72
Positive
The company maintains a healthy equity ratio, reflecting a solid capital structure. The debt-to-equity ratio is low, suggesting manageable leverage. However, the drop in cash and cash equivalents in the TTM period might indicate potential liquidity challenges.
Cash Flow
70
Positive
Eplus shows a strong free cash flow position in the TTM period, indicating good cash generation capabilities. The operating cash flow to net income ratio is favorable, suggesting efficient cash operations. However, the historical negative operating cash flow in previous years indicates past cash flow volatility.
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
1.75B2.23B2.07B1.82B1.57B1.59B
Gross Profit
539.68M550.79M517.52M460.98M393.55M391.19M
EBIT
133.74M158.26M166.16M147.32M106.33M95.28M
EBITDA
168.53M190.80M185.70M172.24M128.83M112.69M
Net Income Common Stockholders
104.77M115.78M119.36M105.60M74.40M69.08M
Balance SheetCash, Cash Equivalents and Short-Term Investments
253.07M253.02M103.09M155.38M129.56M86.23M
Total Assets
1.77B1.65B1.41B1.17B1.08B909.11M
Total Debt
149.54M141.29M174.95M175.50M172.82M200.17M
Net Debt
-103.53M-111.73M71.86M20.12M43.26M113.94M
Total Liabilities
803.44M751.69M632.56M505.46M514.37M422.97M
Stockholders Equity
962.34M901.78M782.26M660.74M562.41M486.14M
Cash FlowFree Cash Flow
240.61M239.95M-24.80M-43.75M117.99M-81.18M
Operating Cash Flow
246.16M248.45M-15.43M-20.57M129.51M-74.17M
Investing Cash Flow
-133.44M-61.96M-18.93M-1.26M-35.76M-20.34M
Financing Cash Flow
-1.39M-36.62M-20.95M47.18M-49.80M100.63M

Eplus Technical Analysis

Technical Analysis Sentiment
Positive
Last Price70.84
Price Trends
50DMA
63.47
Positive
100DMA
67.27
Positive
200DMA
77.97
Negative
Market Momentum
MACD
2.22
Negative
RSI
63.91
Neutral
STOCH
87.35
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLUS, the sentiment is Positive. The current price of 70.84 is above the 20-day moving average (MA) of 67.55, above the 50-day MA of 63.47, and below the 200-day MA of 77.97, indicating a neutral trend. The MACD of 2.22 indicates Negative momentum. The RSI at 63.91 is Neutral, neither overbought nor oversold. The STOCH value of 87.35 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PLUS.

Eplus Risk Analysis

Eplus disclosed 27 risk factors in its most recent earnings report. Eplus reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Eplus Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$1.61B22.1716.09%2.05%3.84%10.25%
65
Neutral
$1.40B-6.48%10.75%56.37%
63
Neutral
$1.28B-6.49%5.15%28.27%
62
Neutral
$11.70B10.39-7.10%2.92%7.45%-8.42%
61
Neutral
$1.92B17.4711.49%-2.22%-17.25%
PDPD
59
Neutral
$1.38B-23.09%8.55%60.23%
DBDBD
55
Neutral
$1.84B0.78-1.02%-2.66%-100.56%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PLUS
Eplus
70.84
-3.34
-4.50%
SPNS
Sapiens
29.59
-2.45
-7.65%
PD
PagerDuty
15.20
-4.60
-23.23%
JAMF
Jamf Holding
10.64
-4.81
-31.13%
MLNK
MeridianLink
17.00
-2.67
-13.57%
DBD
Diebold Nixdorf Inc
49.42
6.80
15.95%

Eplus Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Eplus Welcomes Melissa J. Ballenger to Board
Positive
Jan 7, 2025

ePlus announced the appointment of Melissa J. Ballenger to its Board of Directors, increasing the board size from seven to eight members. Ballenger, an experienced financial executive with a background in financial technology and global finance, will also serve on the Audit Committee. Her extensive experience in strategic and financial planning, capital markets, and risk management is expected to enhance the board’s oversight and contribute to ePlus’s ongoing growth and shareholder value. The appointment reflects ePlus’s commitment to leveraging market conditions and enhancing its strategic growth areas.

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.