Eplus (PLUS) AI Stock Analysis

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Eplus

(NASDAQ:PLUS)

64Neutral

Eplus shows strong financial performance with consistent revenue growth and operational efficiency. However, the negative gross profit margin and liquidity concerns slightly dampen its financial outlook. The technical analysis indicates a bearish trend, which may pose risks in the short term. Valuation is fair, but the absence of dividends might limit appeal. The mixed sentiment from the earnings call highlights both growth potential in services and challenges in hardware sales. Recent positive corporate governance changes add a strategic advantage.

Eplus (PLUS) vs. S&P 500 (SPY)

Market Cap

$1.52B

Dividend YieldN/A

Average Volume (3M)269.04K

Price to Earnings (P/E)14.4

Beta (1Y)1.21

Revenue Growth-2.22%

EPS Growth-17.25%

CountryUS

Employees2,291

SectorTechnology

Sector Strength40

IndustrySoftware - Application

Share Statistics

EPS (TTM)3.92

Shares Outstanding26,616,420

10 Day Avg. Volume211,543

30 Day Avg. Volume269,036

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.80

Price to Cash Flow (P/CF)6.50

P/FCF Ratio6.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$85.00

Price Target Upside50.66% Upside

Rating ConsensusHold

Number of Analyst Covering0

Eplus Business Overview & Revenue Model

Company DescriptionEplus (PLUS) is a leading telecommunications company based in Germany, primarily operating in the mobile network sector. The company offers a wide range of services, including mobile voice and data services, prepaid and postpaid plans, and value-added services such as mobile internet and entertainment solutions. Eplus is known for its robust network infrastructure and customer-centric approach, catering to both individual and corporate clients.

How the Company Makes MoneyEplus generates revenue through multiple streams primarily centered around its mobile network services. The company earns income by offering prepaid and postpaid mobile plans, which include voice, text, and data services. Subscription fees from these plans form a significant portion of their revenue. Additionally, Eplus capitalizes on value-added services such as mobile internet, entertainment packages, and roaming services. The company may also engage in strategic partnerships with handset manufacturers and content providers to boost its service offerings and attract more customers. Furthermore, Eplus could derive revenue from wholesale arrangements, providing network access to mobile virtual network operators (MVNOs).

Eplus Financial Statement Overview

Summary

Eplus exhibits strong revenue growth and operational efficiency, albeit with concerns over the negative gross profit margin in the TTM period. The balance sheet is solid with low leverage, although liquidity needs attention. Cash flow generation is robust, but historical volatility in operating cash flow requires monitoring.

Income Statement

Positive

Eplus has demonstrated consistent revenue growth over the years, with a notable increase from 2023 to the TTM (Trailing-Twelve-Months). The EBIT and EBITDA margins have also remained stable, indicating operational efficiency. However, the negative gross profit margin in the TTM period is concerning and needs to be addressed to maintain profitability.

Balance Sheet

Positive

The company maintains a healthy equity ratio, reflecting a solid capital structure. The debt-to-equity ratio is low, suggesting manageable leverage. However, the drop in cash and cash equivalents in the TTM period might indicate potential liquidity challenges.

Cash Flow

Positive

Eplus shows a strong free cash flow position in the TTM period, indicating good cash generation capabilities. The operating cash flow to net income ratio is favorable, suggesting efficient cash operations. However, the historical negative operating cash flow in previous years indicates past cash flow volatility.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
1.75B	2.21B	2.07B	1.82B	1.57B	1.59B
	Gross Profit
539.68M	531.79M	517.52M	460.98M	393.55M	391.19M
	EBIT
133.74M	158.26M	166.16M	147.32M	106.33M	95.28M
	EBITDA
168.53M	185.87M	185.70M	172.24M	128.83M	112.69M
	Net Income Common Stockholders
104.77M	115.78M	119.36M	105.60M	74.40M	69.08M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
85.08M	253.02M	103.09M	155.38M	129.56M	86.23M
	Total Assets
405.63M	1.65B	1.41B	1.17B	1.08B	909.11M
	Total Debt
53.68M	141.29M	174.95M	175.50M	172.82M	200.17M
	Net Debt
-31.40M	-111.73M	71.86M	20.12M	43.26M	113.94M
	Total Liabilities
220.14M	751.69M	632.56M	505.46M	514.37M	422.97M
	Stockholders Equity
185.49M	901.78M	782.26M	660.74M	562.41M	486.14M
Cash Flow		Free Cash Flow
240.61M	239.95M	-24.80M	-43.75M	117.99M	-81.18M
	Operating Cash Flow
246.16M	248.45M	-15.43M	-20.57M	129.51M	-74.17M
	Investing Cash Flow
-133.44M	-61.96M	-18.93M	-1.26M	-35.76M	-20.34M
	Financing Cash Flow
-1.39M	-36.62M	-20.95M	47.18M	-49.80M	100.63M

Eplus Technical Analysis

Technical Analysis Sentiment

Negative

Last Price56.42

Price Trends

50DMA

67.38

Negative

100DMA

73.21

Negative

200DMA

81.34

Negative

Market Momentum

MACD

-1.57

Negative

RSI

34.67

Neutral

STOCH

28.18

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLUS, the sentiment is Negative. The current price of 56.42 is below the 20-day moving average (MA) of 62.72, below the 50-day MA of 67.38, and below the 200-day MA of 81.34, indicating a bearish trend. The MACD of -1.57 indicates Negative momentum. The RSI at 34.67 is Neutral, neither overbought nor oversold. The STOCH value of 28.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PLUS.

Eplus Risk Analysis

Eplus disclosed 32 risk factors in its most recent earnings report. Eplus reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Eplus Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IT	75 Outperform	$29.44B	23.90	122.93%	―	6.10%	44.57%
CDW	69 Neutral	$19.14B	18.12	49.04%	1.72%	-1.77%	-1.82%
AVT	68 Neutral	$3.66B	11.98	6.45%	3.08%	-12.21%	-51.31%
ARW	66 Neutral	$4.79B	12.41	6.78%	―	-15.66%	-54.03%
PLUS	64 Neutral	$1.52B	14.39	11.39%	―	-2.22%	-17.25%
SNX	62 Neutral	$8.04B	11.97	8.40%	1.67%	4.62%	16.28%
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%

* Technology Sector Average

Performance Comparison

PLUS

Eplus

56.42

-22.05

-28.10%

ARW

Arrow Electronics

90.32

-38.70

-30.00%

AVT

Avnet

42.11

-6.05

-12.56%

Gartner

382.57

-87.32

-18.58%

SNX

TD SYNNEX Corporation

97.28

-17.48

-15.23%

CDW

147.20

-103.97

-41.39%

Eplus Earnings Call Summary

Earnings Call Date: Feb 5, 2025 | % Change Since: -30.29% | Next Earnings Date: May 21, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong growth in services and subscription orders, as well as solid performance in the finance segment. However, the company faced challenges with flat overall revenue, declining adjusted EBITDA, and increased operating expenses. The sentiment of the call is mixed, with notable achievements in service growth offset by difficulties in hardware sales and reduced net earnings.

Highlights

Strong Growth in Services Revenue

Services revenue grew 52% year-on-year, reaching a new high of $114 million, with services gross profit up 45% year-over-year.

Increase in Subscription Orders

Subscription orders increased by 51.4% year-over-year, accounting for 46% of open orders, compared to 31.7% last year.

Solid Performance in Finance Segment

Revenue in the finance segment increased by 20%, driven by higher proceeds from sales of equipment and portfolio earnings.

Successful Integration of Bailiwick Acquisition

The acquisition of Bailiwick contributed to the growth in professional services, with organic managed services revenue increasing by 28% year-over-year.

Lowlights

Flat Overall Revenue

Total revenues were flat year-over-year due to lower product sales, despite faster-growing high-margin service revenue.

Decrease in Adjusted EBITDA

Adjusted EBITDA decreased by 15% due to higher earnings in the finance segment being offset by a decrease in the technology business adjusted EBITDA.

Challenges with Hardware Sales

Softer-than-expected hardware sales and lower demand from some enterprise customers were noted, affecting the overall performance.

Higher Operating Expenses

Consolidated operating expenses increased by 17.3% due to increased headcount from acquisitions and continued investments in the business.

Decline in Net Earnings

Net earnings decreased to $24.1 million or $0.91 per share, down from $27.3 million or $1.02 per share in the previous year.

Company Guidance

During the ePlus fiscal third quarter 2025 earnings call, several key metrics were highlighted regarding the company's financial performance and future guidance. The company reported consolidated net sales of $511 million, slightly above the $509.1 million from the same quarter last year, despite a flat year-over-year performance in product sales. Software subscription orders saw a significant increase of 51.4% year-over-year, now representing almost 46% of open orders, compared to 31.7% previously. Gross billings grew by 6.6% year-over-year, with gross profit rising 5.3%, driven by a shift towards high-margin service revenue, which increased by 52% year-over-year to $114 million. However, adjusted EBITDA decreased by 15% due to higher SG&A expenses and a decrease in the technology business segment. The company has adjusted its fiscal 2025 revenue guidance to a range of $2.07 billion to $2.11 billion and expects adjusted EBITDA to be between $165 million and $171 million, reflecting higher gross to net adjustments and potential tariff impacts.

Eplus Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Eplus Welcomes Melissa J. Ballenger to Board

Positive

Jan 7, 2025

ePlus announced the appointment of Melissa J. Ballenger to its Board of Directors, increasing the board size from seven to eight members. Ballenger, an experienced financial executive with a background in financial technology and global finance, will also serve on the Audit Committee. Her extensive experience in strategic and financial planning, capital markets, and risk management is expected to enhance the board’s oversight and contribute to ePlus’s ongoing growth and shareholder value. The appointment reflects ePlus’s commitment to leveraging market conditions and enhancing its strategic growth areas.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.