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Enghouse Systems (TSE:ENGH)
TSX:ENGH
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Enghouse Systems
(TSX:ENGH)76Outperform
Enghouse Systems (ENGH) vs. S&P 500 (SPY)
Market Cap
$1.43B
Dividend Yield4.32%
Average Volume (3M)88.81K
Price to Earnings (P/E)17.6
Beta (1Y)0.70
Revenue Growth10.68%
EPS Growth12.38%
CountryCA
Employees1,932
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)1.47
Shares Outstanding55,155,490
10 Day Avg. Volume94,474
30 Day Avg. Volume88,812
Financial Highlights & Ratios
PEG Ratio1.42
Price to Book (P/B)N/A
Price to Sales (P/S)2.83
Price to Cash Flow (P/CF)11.30
P/FCF Ratio11.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$34.49Price Target Upside33.08% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Enghouse Systems Business Overview & Revenue Model
Company DescriptionEnghouse Systems Ltd. engages in the development of enterprise software solutions. It operates through the Interactive Management Group and Asset Management Group segments. The Interactive Management Group segment offers customer interaction software and service that are designed to provide customer service, increase efficiency, and manage customer communications. The Asset Management Group segments provides portfolio of products to telecommunication service providers, fleet managements and public safety software solutions for various industries. The company was founded on November 23, 1984 and is headquartered in Markham, Canada.
How the Company Makes MoneyEnghouse Systems makes money primarily through the sale of software licenses, maintenance and support services, and professional services. The company's revenue streams include subscription-based licensing fees, one-time software sales, and recurring maintenance and support contracts. Additionally, Enghouse generates income from professional services such as consulting, training, and implementation support. The company often engages in long-term contracts with clients, providing stable and predictable revenue. Partnerships with key technology providers and resellers also play a significant role in expanding their market reach and enhancing their sales channels.
Enghouse Systems Financial Statement Overview
Summary
Income Statement
Balance Sheet
Cash Flow
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 502.50M | 454.02M | 427.58M | 467.18M | 503.78M | Gross Profit |
| 326.92M | 304.02M | 297.49M | 337.55M | 358.60M | EBIT |
| 133.85M | 122.11M | 95.42M | 111.40M | 124.90M | EBITDA |
| 150.66M | 136.90M | 143.79M | 163.33M | 180.67M | Net Income Common Stockholders |
| 81.33M | 72.25M | 94.50M | 92.79M | 98.59M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 274.73M | 240.36M | 228.05M | 198.83M | 251.79M | Total Assets |
| 833.49M | 783.67M | 705.00M | 674.62M | 763.65M | Total Debt |
| 11.09M | 12.40M | 19.88M | 25.60M | 42.16M | Net Debt |
| -263.15M | -227.13M | -205.23M | -170.29M | -202.64M | Total Liabilities |
| 237.69M | 228.34M | 196.83M | 220.31M | 267.32M | Stockholders Equity |
| 595.81M | 555.33M | 508.17M | 454.31M | 496.32M |
| Cash Flow | Free Cash Flow | |||
| 130.09M | 114.24M | 102.26M | 115.13M | 165.60M | Operating Cash Flow |
| 132.07M | 115.30M | 103.18M | 118.46M | 168.15M | Investing Cash Flow |
| -45.25M | -57.23M | -21.09M | -37.62M | -45.07M | Financing Cash Flow |
| -57.08M | -51.78M | -54.87M | -119.51M | -22.32M |
Enghouse Systems Technical Analysis
Negative
25.92
Price Trends
26.92
Negative
28.33
Negative
28.97
Negative
Market Momentum
-0.41
Positive
38.43
Neutral
27.80
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ENGH, the sentiment is Negative. The current price of 25.92 is below the 20-day moving average (MA) of 26.79, below the 50-day MA of 26.92, and below the 200-day MA of 28.97, indicating a bearish trend. The MACD of -0.41 indicates Positive momentum. The RSI at 38.43 is Neutral, neither overbought nor oversold. The STOCH value of 27.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ENGH.
Enghouse Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.43B | 17.64 | 13.65% | 4.32% | 10.68% | 12.38% | |
76 Outperform | C$103.15B | 119.28 | 23.93% | 0.11% | 23.24% | 21.95% | |
72 Outperform | C$4.39B | 157.81 | 0.01% | ― | 14.85% | -105.25% | |
68 Neutral | C$214.99M | ― | -3.34% | 0.43% | -13.99% | -421.95% | |
66 Neutral | C$2.67B | 38.63 | 5.95% | ― | 18.99% | 52.78% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
TSE:ENGH
Enghouse Systems
26.28
-6.87
-20.71%
OTEX
Open Text
26.01
-10.62
-28.99%
TSE:CSU
Constellation Software
4,988.92
1,310.05
35.61%
TSE:KXS
Kinaxis Inc
160.17
14.17
9.71%
TSE:SYZ
Sylogist
9.42
0.90
10.56%
TSE:MDA
MDA Ltd
23.09
8.13
54.34%
Enghouse Systems Earnings Call Summary
Earnings Call Date: Dec 12, 2024 | % Change Since: -16.69% | Next Earnings Date: Mar 10, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant revenue growth, increased recurring revenue, and strong cash reserves, positioning the company well for future acquisitions and shareholder returns. However, it also noted challenges, including declines in certain revenue segments and issues with AI adoption, which balanced out the overall sentiment.Highlights
Revenue Growth
Revenue increased by 2.1% to $125.7 million in Q4 and by 10.7% for the fiscal year to $502.5 million. Fiscal 2024 marked the third consecutive year of revenue growth.
Increase in Recurring Revenue
Recurring revenue grew 1.1% in Q4 to $88.2 million and by 16.4% for the fiscal year, reaching $346.6 million.
Record Cash Reserves
Cash and cash equivalents reached record levels of $274.2 million, with no external debt.
Successful Acquisitions
Enghouse deployed $43.4 million on acquisitions, including Mediasite and SeaChange, and has been successfully integrating them.
Increased Dividend Payout
Returned $53.1 million to shareholders through dividends, an increase of 18.7% from the previous period.
Lowlights
Decreased Operating Activities and Net Income
Results from operating activities decreased to $33.4 million in Q4, and net income decreased to $22.6 million compared to $25.1 million in Q4 2023.
Decline in Adjusted EBITDA
Adjusted EBITDA decreased to $35.6 million in Q4, a decline from $37.9 million in the previous year.
Decreased Demand for On-Premise Software
There was a noted decline in demand for on-premise perpetual software licenses as more customers transition to SaaS solutions.
Lifesize Revenue Decline
Lifesize, acquired out of bankruptcy, faced a substantial revenue decline, impacting overall SaaS revenue.
Challenges with AI Adoption
Despite developments in AI, the adoption in contact centers has not been as significant as expected.
Company Guidance
During the Enghouse Q4 2024 earnings call, several key financial metrics were discussed, reflecting the company's performance and strategic direction. The company reported a 2.1% increase in quarterly revenue to $125.7 million and a 10.7% rise in annual revenue to $502.5 million. Recurring revenue, including SaaS and maintenance services, grew by 1.1% in the quarter, reaching $88.2 million, which accounts for 70.2% of total revenue. The fiscal year saw a 16.4% increase in recurring revenue, totaling $346.6 million. Despite a decrease in adjusted EBITDA to $35.6 million for the quarter, the annual figure rose by 7.5% to $143.8 million. Cash flow from operating activities was $40.3 million for the quarter and $151.8 million for the year, with cash reserves reaching a record $274.2 million. The company also highlighted its disciplined approach to acquisitions, having spent $43.4 million on recent purchases, and returned $53.1 million to shareholders through dividends, marking an 18.7% increase. Enghouse maintains a strong financial position with no external debt, enabling it to continue executing its growth strategy and returning value to shareholders.Enghouse Systems Corporate Events
M&A TransactionsBusiness Operations and Strategy
Enghouse Systems Expands Transit Solutions with Margento Acquisition
Positive
Mar 4, 2025
Enghouse Systems Limited has acquired Margento R&D, a Slovenian company specializing in transit fare collection and mobile payment solutions. This acquisition aims to expand Enghouse’s European fare collection business and enhance its offerings with Margento’s advanced account-based ticketing and mobile ticketing solutions. The integration of Margento’s scalable Mobility as a Service platform is expected to create synergies and strengthen Enghouse’s market position in the transit sector, benefiting stakeholders including customers, partners, and employees.
Financial Disclosures
Enghouse Systems to Announce Q1 2025 Results
Neutral
Mar 3, 2025
Enghouse Systems Limited announced its plan to release its first quarter fiscal 2025 results on March 10, 2025, followed by a conference call on March 11, 2025, to discuss the results. This announcement is significant as it provides stakeholders with an opportunity to gain insights into the company’s financial performance and strategic direction for the upcoming year.
Enghouse Systems Expands with Aculab Acquisition
Dec 16, 2024
Enghouse Systems Limited has acquired Aculab PLC, enhancing its portfolio with advanced AI and communication solutions. This acquisition brings innovative technologies like cloud platforms, AI-driven answering machine detection, and biometrics to Enghouse’s offerings, targeting enterprises and sectors like healthcare and emergency management. The move aims to expand Enghouse’s market reach while maintaining Aculab’s legacy of innovation.
Enghouse Systems Reports Strong Fiscal Growth
Dec 12, 2024
Enghouse Systems reported a robust fiscal year with a 10.7% increase in revenue, surpassing $500 million, and a notable rise in recurring revenue driven by SaaS and maintenance services. Net income also saw a significant boost, highlighting the company’s focus on profitability and strategic acquisitions. With record cash reserves and no external debt, Enghouse is well-positioned for future growth and continued dividend returns to shareholders.
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.