After market close yesterday, Enghouse Systems (TSE:ENGH) (OTC:EGHSF), a developer of enterprise software solutions, reported its Fiscal Q1-2023 earnings results, which missed both revenue and earnings-per-share (EPS) expectations. As a result, the stock finished a massive 24.7% lower despite the company announcing an 18.9% dividend increase to C$0.22 per share (paid quarterly).
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ENGH’s revenue reached C$106.4 million compared to the consensus estimate of about C$109.6 million while representing a 4.2% decrease from last year’s figure.
Also, ENGH’s adjusted earnings per share were C$0.31, down 20.5% year-over-year, missing estimates of C$0.35. The firm attributed its earnings fall mainly due to a decline in software licenses as well as a lower gross margin from professional services. In fact, its gross profit margin was 67.3% compared to 70.5% last year.
ENGH’s adjusted cash flow also fell, coming in at C$32.6 million for the quarter, down 15.8%. Similarly, adjusted EBITDA was C$32.3 million, down from Q1-2022’s figure of C$38.6 million, and its adjusted EBITDA margin fell to 30.3% compared to 34.7% one year earlier.
Notably, however, Enghouse ended Q1 with a cash, cash equivalents, and short-term investments balance of C$250.7 million, along with no debt.
Is Enghouse Stock a Buy, According to Analysts?
According to analysts, Enghouse stock earns a Moderate Buy consensus rating based on three Buys and one Hold assigned in the past three months. The average Enghouse stock price forecast of C$43.40 implies 32.4% upside potential. Analyst price targets range from a high of C$49.08 to a low of C$36.06.
