Enghouse Systems (ENGH) AI Stock Analysis

• Market Cap: $1.26B
• Dividend Yield: 6.27%
• Average Volume (3M): 129.20K
• Price to Earnings (P/E): 16.8
• Beta (1Y): 0.43
• Revenue Growth: 0.03%
• EPS Growth: -10.21%
• Country: CA
• Employees: 1,932
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): 0.31
• Shares Outstanding: 55,086,906
• 10 Day Avg. Volume: 129,035
• 30 Day Avg. Volume: 129,204
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.80
• Enterprise Value/Revenue: 1.99
• Enterprise Value/Gross Profit: 3.10
• Enterprise Value/Ebitda: 7.10
• 1Y Price Target: $25.75
• Price Target Upside: 22.91% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 72 Outperform
• Price Target: C$23.50 ▲(12.17% Upside)

Enghouse Systems' overall stock score is driven by its strong financial performance and attractive valuation, which are the most significant factors. The company's robust balance sheet and high dividend yield provide a solid foundation. However, technical analysis indicates bearish trends, and challenges highlighted in the earnings call, such as revenue declines and restructuring costs, slightly dampen the outlook.

Enghouse Systems Business Overview & Revenue Model

Company Description

Enghouse Systems Limited (ENGH) is a Canadian software and services company that specializes in providing solutions for the communications, contact center, and enterprise market sectors. The company develops a range of software products designed to enhance customer engagement, optimize operational efficiency, and improve service delivery across various industries. Enghouse operates through several divisions, including Enghouse Interactive, Enghouse Networks, and Enghouse Transportation, offering products that encompass customer experience management, network management, and transportation solutions.

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 demonstrates robust financial health with strong profitability margins and solid cash flow management. The low debt-to-equity ratio and high equity ratio highlight financial stability, though slight pressure on profitability is noted.

Income Statement

Enghouse Systems shows a stable financial performance with a gross profit margin of 64.1% and a net profit margin of 15.6% for the TTM. The revenue growth rate is modest at 0.5% compared to the previous year, indicating a steady market position. EBIT and EBITDA margins are strong at 22.8% and 28.0%, respectively, reflecting efficient operational management. However, the decline in EBIT and EBITDA from the previous period suggests some pressure on profitability.

Balance Sheet

The balance sheet reveals a robust financial position with a low debt-to-equity ratio of 0.02, showcasing minimal reliance on debt financing. The return on equity is healthy at 13.1%, indicating effective use of shareholder funds. The equity ratio stands at 69.2%, highlighting strong equity financing and asset stability. Continuous improvement in stockholders' equity suggests prudent financial management.

Cash Flow

Enghouse Systems demonstrates solid cash flow management with an operating cash flow to net income ratio of 1.65 and a free cash flow to net income ratio of 1.63 for the TTM. Although the free cash flow growth shows a slight decline of 1.7%, the company maintains a strong cash-generating ability, supporting operational and strategic initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	505.02M	502.50M	454.02M	427.58M	467.18M	503.78M
Gross Profit	323.77M	326.92M	304.02M	297.49M	337.55M	358.60M
EBITDA	141.42M	150.66M	136.90M	143.79M	163.33M	180.67M
Net Income	78.59M	81.33M	72.25M	94.50M	92.79M	98.59M
Balance Sheet
Total Assets	868.67M	833.49M	783.67M	705.00M	674.62M	763.65M
Cash, Cash Equivalents and Short-Term Investments	263.52M	274.73M	240.36M	228.05M	198.83M	251.79M
Total Debt	10.83M	11.09M	12.40M	19.88M	25.60M	42.16M
Total Liabilities	267.42M	237.69M	228.34M	196.83M	220.31M	267.32M
Stockholders Equity	601.26M	595.81M	555.33M	508.17M	454.31M	496.32M
Cash Flow
Free Cash Flow	127.83M	130.09M	114.24M	102.26M	115.13M	165.60M
Operating Cash Flow	129.84M	132.07M	115.30M	103.18M	118.46M	168.15M
Investing Cash Flow	-66.26M	-45.25M	-57.23M	-21.09M	-37.62M	-45.07M
Financing Cash Flow	-70.77M	-57.08M	-51.78M	-54.87M	-119.51M	-22.32M

Enghouse Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 20.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 Negative. The current price of 20.95 is below the 20-day moving average (MA) of 22.34, below the 50-day MA of 22.75, and below the 200-day MA of 25.03, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 30.67 is Neutral, neither overbought nor oversold. The STOCH value of 44.63 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
ENGH	72 Outperform	$1.26B	16.79	12.56%	6.27%	0.03%	-10.21%
Sector *	61 Neutral	$35.52B	8.84	-11.06%	1.87%	8.55%	-8.14%
OTEX	―	$8.50B	20.25	10.73%	3.20%	―	―
KXS	70 Outperform	C$5.37B	155.34	5.93%	―	15.81%	22.17%
TCS	68 Neutral	C$523.16M	118.10	6.45%	0.97%	4.03%	199.20%
LSPD	53 Neutral	C$2.22B	―	-36.64%	―	18.75%	-386.84%
DCBO	―	$923.27M	43.85	55.53%	―	―	―

Enghouse Systems Corporate Events

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.

Enghouse Systems Reports Q2 2025 Results Amid Strategic Acquisitions

Enghouse Systems Limited reported a slight decrease in revenue for the second quarter of 2025, with a 0.8% drop compared to the same period last year. Despite the decline, the company continues to prioritize recurring revenue and maintain a strong cash position, which supports its acquisition strategy. The recent acquisitions of Margento and Trafi are expected to bolster Enghouse’s transportation offerings and align with its long-term growth vision. The company remains financially resilient with no external debt and continues to pay dividends, reflecting its commitment to shareholder returns.

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.