Enghouse Systems (ENGH) AI Stock Analysis

• Market Cap: C$1.13B
• Dividend Yield: 5.62%
• Average Volume (3M): 151.38K
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.47
• Revenue Growth: -0.72%
• EPS Growth: -9.27%
• Country: CA
• Employees: 1,932
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.38
• 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: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$21.60
• Price Target Upside: 5.88% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: C$23.50 ▲(15.20% Upside)

Enghouse Systems' overall score reflects its strong financial stability and attractive valuation, supported by effective cost management and strategic acquisitions. However, declining revenue and free cash flow growth, along with challenges in certain business segments, temper the outlook.

Positive Factors

Strong Financial Position

A robust cash position and absence of external debt provide financial flexibility, enabling strategic investments and acquisitions without leveraging, ensuring long-term stability.

Recurring Revenue Model

A high percentage of recurring revenue ensures predictable cash flows and reduces revenue volatility, supporting sustained business operations and strategic planning.

Successful Integration of Acquisitions

Successful integration of acquisitions enhances product offerings and market reach, contributing to revenue growth and strengthening competitive positioning in the SaaS sector.

Negative Factors

Declining Revenue Growth

Continued revenue decline poses a risk to long-term profitability and market competitiveness, necessitating strategic adjustments to reverse the trend and sustain growth.

Challenges in IMG Division

Ongoing issues in the IMG division highlight operational challenges, potentially impacting overall performance and requiring targeted strategies to address market demands.

Decline in Free Cash Flow Growth

Negative free cash flow growth can limit investment capacity and financial flexibility, affecting the company's ability to fund new projects and maintain shareholder returns.

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 Systems generates revenue primarily through the sale of software licenses, maintenance and support services, and professional services. The company earns substantial income from its subscription-based offerings, particularly in the contact center and customer engagement sectors, where clients pay recurring fees for access to its platforms. Additionally, Enghouse benefits from service agreements that provide ongoing maintenance and updates for its software products. Significant partnerships with telecommunications companies and system integrators enhance its distribution capabilities and contribute to its earnings. The company also engages in strategic acquisitions to expand its product portfolio and market reach, which plays a critical role in driving revenue growth.

Enghouse Systems Financial Statement Overview

Summary

Enghouse Systems shows strong profitability and a robust balance sheet with low leverage. However, declining revenue and free cash flow growth present risks to future financial performance. The company must address these negative trends to maintain stability.

Income Statement

Enghouse Systems has experienced a decline in revenue growth, with a negative growth rate of -24.4% in the most recent year. Despite this, the company maintains healthy profitability margins, with a gross profit margin of 56.05% and a net profit margin of 14.77%. The EBIT and EBITDA margins are also strong at 18.45% and 25.99%, respectively. However, the declining revenue trend poses a risk to future profitability.

Balance Sheet

The company exhibits a strong balance sheet with a low debt-to-equity ratio of 0.018, indicating minimal leverage. The return on equity is solid at 12.09%, reflecting efficient use of equity to generate profits. The equity ratio stands at 71.12%, suggesting a stable financial structure with a high proportion of assets financed by equity.

Cash Flow

Enghouse Systems shows a decline in free cash flow growth, with a rate of -10.22%. The operating cash flow to net income ratio is 0.48, indicating moderate cash generation relative to net income. The free cash flow to net income ratio is strong at 0.99, suggesting effective conversion of net income into free cash flow. However, the negative growth in free cash flow is a concern.

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

Enghouse Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 20.40
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ENGH, the sentiment is Positive. The current price of 20.4 is above the 20-day moving average (MA) of 20.32, above the 50-day MA of 20.31, and below the 200-day MA of 22.39, indicating a neutral trend. The MACD of 0.13 indicates Negative momentum. The RSI at 54.62 is Neutral, neither overbought nor oversold. The STOCH value of 49.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ENGH.

Enghouse Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DSG	82 Outperform	C$10.58B	49.10	10.70%	―	14.55%	15.55%
KXS	78 Outperform	C$4.95B	101.46	8.24%	―	15.11%	75.40%
OTEX	72 Outperform	C$11.72B	17.12	12.32%	3.27%	-5.01%	13.21%
ENGH	69 Neutral	C$1.13B	15.27	12.20%	5.62%	-0.72%	-9.27%
TCS	65 Neutral	C$473.08M	88.20	8.14%	1.07%	7.00%	110.62%
DCBO	63 Neutral	C$876.41M	28.78	49.99%	―	16.25%	31.71%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Enghouse Systems Corporate Events

Enghouse Systems Reports Third Quarter Results Amid Market Challenges

Enghouse Systems Limited reported a slight decline in its third-quarter revenue and net income compared to the previous year, amidst challenging macroeconomic conditions. Despite this, the company maintained a strong cash position with $271.6 million in cash and short-term investments and no external debt. Enghouse is focusing on cost management and strategic acquisitions to drive long-term growth, while continuing to generate positive cash flows and maintaining a significant portion of its revenue from recurring sources.

The most recent analyst rating on (TSE:ENGH) stock is a Hold with a C$26.00 price target. To see the full list of analyst forecasts on Enghouse Systems stock, see the TSE:ENGH Stock Forecast page.

Enghouse Networks Powers JCI’s Neo-Carrier Strategy with Core Messaging Solutions

Enghouse Networks has been selected by Japan Communications Inc. (JCI) to provide its core messaging and security solutions as part of JCI’s Neo-Carrier Strategy. This initiative aims to launch a new mobile service that operates independently from traditional mobile network constraints by integrating voice, SMS, and data connectivity directly with MNO infrastructure. The deployment of Enghouse Networks’ SMS Core System, which includes SMSC, SMS Firewall, and Voicemail, marks a significant milestone for JCI. This system offers high performance, scalability, and compliance with open standards, positioning JCI for future advancements in mobile messaging services.

The most recent analyst rating on (TSE:ENGH) stock is a Buy with a C$43.00 price target. To see the full list of analyst forecasts on Enghouse Systems stock, see the TSE:ENGH Stock Forecast page.