Enghouse Systems (ENGH) AI Stock Analysis

• Market Cap: $831.72M
• Dividend Yield: 5.69%
• Average Volume (3M): 151.38K
• Price to Earnings (P/E): 13.6
• Beta (1Y): 0.41
• Revenue Growth: -0.72%
• EPS Growth: -9.27%
• Country: CA
• Employees: 1,932
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.32
• Shares Outstanding: 54,754,684
• 10 Day Avg. Volume: 110,574
• 30 Day Avg. Volume: 151,377
• PEG Ratio: -1.76
• Price to Book (P/B): 1.88
• Price to Sales (P/S): 2.30
• P/FCF Ratio: 11.13
• Enterprise Value/Market Cap: 0.70
• Enterprise Value/Revenue: 1.18
• Enterprise Value/Gross Profit: 2.18
• Enterprise Value/Ebitda: 4.74
• 1Y Price Target: $21.64
• Price Target Upside: 42.44% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): 1.52
• Revenue Forecast (FY): $506.03M

• Rating: 67 Neutral
• Price Target: C$16.50 ▲(8.62% Upside)
• Action: Reiterated Date: 03/14/26
• Date: Action: Reiterated 03/14/26

The score is driven primarily by strong financial quality (low leverage, solid cash conversion) and supportive valuation via a high dividend yield. This is tempered by weak technical trend (price below major moving averages) and fundamental growth headwinds highlighted by the recent revenue decline and segment pressure despite improving cost efficiency.

Positive Factors

Strong balance sheet

Having $269.1M cash and no external debt gives Enghouse durable financial flexibility. Low leverage supports disciplined M&A, dividend increases and buybacks, funds restructuring and R&D, and reduces refinancing risk—key for sustaining strategy through cycles.

High recurring revenue mix

With recurring streams >69% of revenue, Enghouse benefits from predictable cash flows and higher customer lifetime value. This supports stable margins, reliable free cash flow conversion and planning, and cushions the business during license-cycle volatility over the medium term.

AMG growth and disciplined M&A

Asset Management Group growth and targeted acquisitions (e.g., Margento, Trafi, Sixbell) diversify revenues and expand markets. Consistent AMG performance provides a higher-growth, scalable pillar that offsets IMG pressure and validates acquisitive growth strategy.

Negative Factors

Overall revenue decline

Total revenue has slipped year-over-year and TTM trends show sharper deterioration. Persistent top-line decline reduces operating leverage and free cash generation, constraining reinvestment, acquisition funding and sustainable dividend support if the trend continues.

IMG SaaS transition pressure

IMG's shift to SaaS has caused maintenance churn and lower near-term bookings. While SaaS can raise long-term recurring revenue, the migration creates execution risk and short-to-medium-term revenue erosion until customer conversions and upsell mature.

Margin compression and weaker cash momentum

Gross margin compression from prior mid-60s to ~56% and negative FCF growth weaken the company's cash cushion. Reduced margin and cash momentum make returns and reinvestment more sensitive to pricing, mix shifts, and integration costs from acquisitions.

Enghouse Systems Business Overview & Revenue Model

Company Description

Enghouse Systems Limited, together with its subsidiaries, develops enterprise software solutions worldwide. It operates through two segments, Interactive Management Group and Asset Management Group. The Interactive Management Group segment provides customer interaction software and services to facilitate remote work, enhance customer service, increase efficiency, and manage customer communications across various types of interactions, including voice, email, web chats, text, and video. Its technologies include contact center, video collaboration, interactive voice response, outbound dialers, attendant console, agent performance optimization, business intelligence, and analytics that deployed in private cloud, multi-tenant cloud, or on-premise environments. This segment serves insurance companies, telecoms, banks, business process service providers, as well as technology and health care companies. The Asset Management Group segment offers a portfolio of software and services to cable operators, network telecommunication providers, media, transit, defense, and public safety companies. This segment's products include network infrastructure, operations support systems, and business support systems, as well as video and cloud TV solutions. This segment also provides fleet routing, dispatch, scheduling, transit e-ticketing and automated fare collection, communications, and emergency control center solutions for the transportation, government, first responders, distribution, and security sectors. Enghouse Systems Limited was incorporated in 1984 and is headquartered in Markham, Canada.

How the Company Makes Money

Enghouse makes money mainly by selling and supporting enterprise software across its two operating segments. Key revenue streams typically include: (1) software license revenue (upfront or term-based) for its customer interaction/contact center and communications offerings and for its asset/operations-related solutions; (2) maintenance and support contracts tied to deployed software, generating recurring revenue for updates, technical support, and product enhancements; (3) subscription/hosted or cloud-based software fees where customers pay recurring charges to access Enghouse solutions (when offered under subscription or hosted delivery models); and (4) professional services revenue from implementation, integration, customization, training, and consulting needed to deploy and optimize its systems in customer environments. A significant factor in Enghouse’s earnings is its acquisition-driven strategy, where acquired product lines contribute additional license/subscription, maintenance, and services revenue, and the company can expand recurring support revenues from an enlarged installed base. Specific customer-level contracts or partnership arrangements: null.

Enghouse Systems Financial Statement Overview

Summary

Strong balance sheet (very low leverage and solid equity base) and credible cash conversion, but recent revenue softness/decline and margin compression reduce near-term earnings power.

Income Statement

Profitability remains solid, with TTM (Trailing-Twelve-Months) gross margin ~56% and net margin ~14.8%, and EBIT/EBITDA margins still healthy. However, growth has clearly cooled: annual revenue was essentially flat in 2025 versus 2024, and TTM (Trailing-Twelve-Months) revenue shows a sharp decline versus the prior period provided. Margins have also compressed from 2023–2024 highs (gross margin ~65–67% previously), suggesting less favorable mix, pricing, or cost pressure.

Balance Sheet

The balance sheet is a key strength. Leverage is very low (debt-to-equity ~0.02 in both annual and TTM (Trailing-Twelve-Months) views), with equity around $600M on ~$856M of assets, providing strong financial flexibility. Returns on equity are consistently healthy (~12–20% historically; ~12% in the most recent periods), though the downshift from earlier years indicates profitability is not as strong as it was.

Cash Flow

Cash generation is generally strong and high-quality: free cash flow is roughly in line with net income (free cash flow to net income ~0.99 across periods), supporting earnings credibility. That said, cash flow momentum has weakened—free cash flow growth is negative in 2025 and TTM (Trailing-Twelve-Months)—and operating cash flow covers less than half of total debt, which is not a concern given the small debt load but does reduce the cash-flow-based cushion if profitability continues to soften.

Breakdown	TTM	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	494.98M	498.88M	502.50M	454.02M	427.58M	467.18M
Gross Profit	266.89M	279.64M	326.92M	304.02M	297.49M	337.55M
EBITDA	122.92M	129.70M	150.66M	136.90M	143.79M	163.33M
Net Income	69.26M	73.67M	81.33M	72.25M	94.50M	92.79M
Balance Sheet
Total Assets	856.22M	856.82M	833.49M	783.67M	705.00M	674.62M
Cash, Cash Equivalents and Short-Term Investments	260.21M	269.09M	274.73M	240.36M	228.05M	198.83M
Total Debt	10.50M	11.14M	11.09M	12.40M	19.88M	25.60M
Total Liabilities	256.38M	247.35M	237.69M	228.34M	196.83M	220.31M
Stockholders Equity	599.84M	609.47M	595.81M	555.33M	508.17M	454.31M
Cash Flow
Free Cash Flow	102.28M	103.16M	130.09M	114.24M	102.26M	115.13M
Operating Cash Flow	104.18M	104.63M	132.07M	115.30M	103.18M	118.46M
Investing Cash Flow	-33.46M	-34.80M	-45.25M	-57.23M	-21.09M	-37.62M
Financing Cash Flow	-83.97M	-82.63M	-57.08M	-51.78M	-54.87M	-119.51M

Enghouse Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 15.19
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: 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 15.19 is below the 20-day moving average (MA) of 17.50, below the 50-day MA of 18.19, and below the 200-day MA of 20.41, indicating a bearish trend. The MACD of -0.21 indicates Positive momentum. The RSI at 21.81 is Positive, neither overbought nor oversold. The STOCH value of 30.22 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DSG	76 Outperform	$8.56B	38.38	10.76%	―	14.55%	15.55%
DCBO	74 Outperform	C$750.47M	16.69	73.40%	―	16.25%	31.71%
TCS	70 Outperform	C$380.61M	55.29	8.14%	1.07%	7.00%	110.62%
KXS	69 Neutral	C$3.73B	49.33	8.24%	―	15.11%	75.40%
ENGH	67 Neutral	$831.72M	13.64	12.17%	5.69%	-0.72%	-9.27%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
OTEX	59 Neutral	C$7.90B	12.20	10.88%	3.27%	-5.01%	13.21%

Enghouse Systems Corporate Events

Enghouse Schedules Q1 2026 Results Release and Virtual AGM

Enghouse Systems plans to release its first quarter fiscal 2026 financial results after markets close on March 12, 2026, followed by a conference call the next morning to discuss the performance. The results call will also be webcast and archived online, providing investors and analysts with structured access to management’s commentary on current trading and outlook.

The company will additionally hold its Fiscal 2025 Annual General Meeting virtually on March 12, 2026, focusing on formal corporate business items. Operational and first-quarter performance updates will be reserved for the subsequent conference call, signaling clear separation between governance matters and detailed financial disclosure for shareholders and market participants.

The most recent analyst rating on (TSE:ENGH) stock is a Hold with a C$19.50 price target. To see the full list of analyst forecasts on Enghouse Systems stock, see the TSE:ENGH Stock Forecast page.