Enghouse Systems (ENGH) AI Stock Analysis

• Market Cap: $1.46B
• Dividend Yield: 4.02%
• Average Volume (3M): 84.41K
• Price to Earnings (P/E): 17.2
• Beta (1Y): 0.48
• Revenue Growth: 8.11%
• EPS Growth: 15.83%
• Country: CA
• Employees: 1,932
• Sector: Technology
• Sector Strength: 75
• Industry: Software - Application
• EPS (TTM): 0.40
• Shares Outstanding: 55,155,490
• 10 Day Avg. Volume: 85,852
• 30 Day Avg. Volume: 84,413
• PEG Ratio: 3.51
• Price to Book (P/B): 2.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.80
• 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: $30.01
• Price Target Upside: 14.76% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 75 Outperform
• Price Target: C$30.00 ▲( 14.72% Upside)

Enghouse Systems demonstrates strong financial stability with impressive profitability and solid cash flow, contributing significantly to its high overall score. While technical indicators show mixed signals, the company's fair valuation and proactive strategic initiatives, including acquisitions, bolster confidence in its growth potential despite some operational challenges.

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 through the sale of software licenses, recurring subscription fees, and professional services. Key revenue streams include its contact center and video collaboration solutions, which are utilized by businesses to manage customer interactions and facilitate remote communication. The company also earns from its transportation solutions, which are used by transit operators for scheduling, dispatch, and passenger information systems. Enghouse's strategic acquisitions of complementary technology companies further bolster its product offerings and market reach, contributing to sustained revenue growth. Additionally, the company benefits from long-term customer contracts and partnerships with telecommunications and service providers, enhancing its recurring revenue base.

Enghouse Systems Financial Statement Overview

Summary

Enghouse Systems presents a financially sound profile with strong profitability, a stable balance sheet, and robust cash flow generation. While revenue growth is moderate, the company maintains impressive margins and a conservative leverage position, reflecting its resilience and operational efficiency in the software industry.

Income Statement

Enghouse Systems shows strong profitability with a gross profit margin of 62.1% and a net profit margin of 16.8% in the TTM (Trailing-Twelve-Months). The company has maintained stable EBIT and EBITDA margins of 22.3% and 29.8% respectively. Although revenue growth is modest at 0.7%, the company has demonstrated consistent profitability over the years.

Balance Sheet

The balance sheet of Enghouse Systems is solid, with a low debt-to-equity ratio of 0.019, indicating minimal leverage. Return on equity stands at a healthy 14.0%, and the equity ratio is robust at 70.2%, showcasing financial stability and a strong equity base.

Cash Flow

Enghouse Systems exhibits a strong cash flow position, with a slight growth in free cash flow by 1.0%. The operating cash flow to net income ratio is 1.57, highlighting efficient cash generation relative to net income. The free cash flow to net income ratio stands at 1.54, reflecting strong cash flow conversion.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
506.02M	502.50M	454.02M	427.58M	467.18M	503.78M
	Gross Profit
314.28M	326.92M	304.02M	297.49M	337.55M	358.60M
	EBIT
112.74M	133.85M	122.11M	95.42M	111.40M	124.90M
	EBITDA
150.83M	150.66M	136.90M	143.79M	163.33M	180.67M
	Net Income Common Stockholders
85.10M	81.33M	72.25M	94.50M	92.79M	98.59M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
271.09M	274.73M	240.36M	228.05M	198.83M	251.79M
	Total Assets
865.39M	833.49M	783.67M	705.00M	674.62M	763.65M
	Total Debt
11.50M	11.09M	12.40M	19.88M	25.60M	42.16M
	Net Debt
-258.81M	-263.15M	-227.13M	-205.23M	-170.29M	-202.64M
	Total Liabilities
258.29M	237.69M	228.34M	196.83M	220.31M	267.32M
	Stockholders Equity
607.10M	595.81M	555.33M	508.17M	454.31M	496.32M
Cash Flow		Free Cash Flow
131.40M	130.09M	114.24M	102.26M	115.13M	165.60M
	Operating Cash Flow
133.42M	132.07M	115.30M	103.18M	118.46M	168.15M
	Investing Cash Flow
-52.05M	-45.25M	-57.23M	-21.09M	-37.62M	-45.07M
	Financing Cash Flow
-69.35M	-57.08M	-51.78M	-54.87M	-119.51M	-22.32M

Enghouse Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.15
• 50DMA: Positive
• 100DMA: Positive
• 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 26.15 is above the 20-day moving average (MA) of 25.57, above the 50-day MA of 25.22, and below the 200-day MA of 27.68, indicating a neutral trend. The MACD of 0.44 indicates Negative momentum. The RSI at 58.05 is Neutral, neither overbought nor oversold. The STOCH value of 38.69 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
ENGH	75 Outperform	$1.46B	17.22	14.76%	4.02%	8.11%	15.83%
Sector *	61 Neutral	$11.41B	10.19	-7.05%	2.95%	7.46%	-10.52%
OTEX		$7.37B	11.59	15.87%	3.69%	―	―
TCS	76 Outperform	C$645.82M	213.80	4.56%	0.75%	2.61%	46.26%
KXS	73 Outperform	C$5.60B	399.45	2.32%	―	15.14%	-31.45%
LSPD	63 Neutral	C$2.09B	―	-33.64%	―	23.95%	39.68%
DCBO		$808.89M	34.28	41.12%	―	―	―

Enghouse Systems Corporate Events

Enghouse and NKS110 IKS Enhance Norway’s Emergency Response System

Enghouse Transportation & Public Safety, in collaboration with NKS110 IKS, has successfully implemented the Enghouse LocusEmergency OHV (LEO) system across all 110 emergency dispatch centers in Norway. This deployment enhances public safety by providing advanced resource management tools that improve situational awareness and response times. The initiative strengthens Norway’s emergency infrastructure, ensuring readiness for current and future challenges, and reflects Enghouse’s commitment to delivering cutting-edge technology for public safety organizations.

Enghouse Systems Acquires Trafi to Boost Mobility-as-a-Service Offerings

Enghouse Systems Limited has acquired Trafi Ltd., a leading provider of Mobility-as-a-Service (MaaS) solutions, to enhance its transportation mobility solutions portfolio. This acquisition allows Enghouse to integrate Trafi’s scalable MaaS platform, which unifies various transport modes into a seamless user experience, thereby expanding its reach and capabilities in the transit market. The move is expected to accelerate the delivery of integrated mobility experiences globally, benefiting cities and public transport authorities by offering advanced features like real-time data mapping and in-app ticketing.

Enghouse Systems Elects Directors at Annual Meeting

Enghouse Systems Limited announced the results of its annual shareholders’ meeting, where all nominated directors were elected. The meeting, held virtually, saw high approval rates for the directors, reflecting strong shareholder support and potentially reinforcing the company’s strategic direction and governance stability.

Enghouse Systems Reports Q1 Revenue Growth and Strategic Acquisitions

Enghouse Systems Limited reported a 2.9% increase in revenue to $124.0 million for the first quarter of 2025, with net income rising by 20.8% to $21.9 million. The company continues to focus on recurring revenue streams, particularly through SaaS and maintenance services, while strategically balancing on-premise and cloud solutions. Enghouse’s acquisition of Aculab PLC and Margento R&D d.o.o. strengthens its offerings in communication, security, and transportation sectors. Despite global uncertainties, Enghouse maintains a strong cash position and has increased its quarterly dividend by 15.4%, reflecting its commitment to long-term profitability and shareholder returns.

Enghouse Systems Expands Transit Solutions with Margento Acquisition

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.

Enghouse Systems to Announce Q1 2025 Results

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.