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Investor Insights

This summary was created by AI, based on 8 opinions in the last 12 months.

Enghouse Systems, with the symbol ENGH-T, has shown consistent growth in recurring revenue and cash from operations. The company is transitioning to a monthly subscription model, similar to Microsoft, which is expected to result in more regular and predictable revenues. The company has a strong balance sheet with over $200M in cash and no debt. While there have been temporary margin compressions, experts believe the company is undervalued and has good long-term prospects.

Consensus
Undervalued
Valuation
Undervalued
DON'T BUY
Enghouse Systems
How will AI effect software?

We need to see more commercial opportunities open up. All Canadian tech has rolled over, including ENGH. The space needs more acquisitions. If the companies don't grow quickly, they will decline, on relative terms.

computer software / processing
STRONG BUY
Enghouse Systems

They reported a beat last Thursday. They're turning their software business into the monthly subscription model like Microsoft's. Margins will be smaller, but incremental revenues will be more regular and less lumpy. Earnings were good. Dividend rises 10% annually. He holds it in TFSAs and just made a major purchase.

computer software / processing
HOLD
Enghouse Systems
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

ENGH recorded EPS of $0.45 in Q4, beating analysts revenue expectations of $0.42. Revenue came in at $123.1M, displaying year-over-year growth of 13.9% but missed estimates of $125M. Recurring revenue grew 35%. Cash from operations was decent at $28.3M. Cash was strong at $240.4M while total debt was only $12.4M, but the company stated that none of the debt was external. Net income was $25.1M but decreased from the prior year’s total at $36.9M. This was a decent quarter for ENGH as the company shifts its focus to expanding its recurring SaaS revenue base.
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computer software / processing
BUY
Enghouse Systems

His apologies on this one. He'd underwater too, but stills owns it and is still buying. Wonderful company. Very well run. Well-positioned for this environment of distressed acquisitions. $200M in cash, no debt. Don't give up, people will come around again.

computer software / processing
WATCH
Enghouse Systems

Follows it. Stock's come down as company digests acquisitions. Interesting.

computer software / processing
HOLD
Enghouse Systems
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

ENGH is now trading at 22x times' Forward P/E. Revenue was in a decline in the last two years after a very strong 2020, which was partly covid-driven. The balance sheet is strong, with net cash of $160M. ENGH could see upside potential when management ramps up on acquisitions. ENGH is still a decent company with a solid portfolio of businesses (high gross margins, in the 70% range). The multiple ENGH is trading also at the lower range of historical averages (ranging from 22x to 37x). We think ENGH is a HOLD for now, we would want to see management do something with the cash balance to create shareholder value (either do more M&A or buybacks). We would reconsider the position a while from now if management does not show improvement in capital allocation.
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computer software / processing
BUY
Enghouse Systems

Very defensive business model. Over $200M on balance sheet, no debt. Accelerated acquisitions in a difficult time. Transitioning to SaaS, with bumps along the way, resulting in temporary margin compression in latest results. Undervalued. He'd add today.

computer software / processing
BUY
Enghouse Systems

35 recent local acquisitions. Vertical software solutions in virtual healthcare, contact centres, and telecom. Pretty healthy balance sheet. Lots of cash for more acquisitions. Solid recurring revenue, significant free cashflow. Price target of $59.50. Yield is 2.4%.

computer software / processing
BUY ON WEAKNESS
Enghouse Systems

Excellent company with good long term prospects.
Lots of cash on the balance sheet.
Shares not cheap enough to buy.
Will buy when shares fall.
Good business for the long term investor.

computer software / processing
HOLD
Enghouse Systems
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

4Q EPS of 31c missed estimates; revenue of $106M missed estimates by 3%. 
EBITDA of $32.2M missed estimates by 10%. 
The quarterly results have always been 'chunky' but this was certainly a miss. 
Still, the company raised its dividend 19% and has $209M cash. 
Revenue was lower due to fewer perpetual licence and hardware sales. 
There was also a large contract that had lower margins. 
We are less concerned for the future, as the acquisitions of Qumo and Navita closed after quarter-end, and these should help 2023 results. 
EPS is expected to grow faster next year. 
All in, not a great quarter and we might not expect anything here in the short term. 
At 22X earnings and with a growing dividend we would put it in the HOLD category today. 
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computer software / processing
PAST TOP PICK
Enghouse Systems
(A Top Pick Feb 16/22, Up 4%)

Went down with tech last year. Debt-free balance sheet, over $200M in cash, at a time when tech's been washed out. Acquisition activity and share buybacks ramping up. Still undervalued. FCF yield around 5.5%. He'd buy today.

computer software / processing
DON'T BUY
Enghouse Systems

In call centres and infrastructure management. An M&A story and deploying capital. But organic growth went negative on the stuff they were buying, and they were very dependent on acquisitions. This turned off the market. No strategic review happened. They need to show organic growth or make an exciting, accretive buy to excite the market.

computer software / processing
COMMENT
Enghouse Systems
It has broken out in a downward trend from its base. He doesn't trade on opinions, just the rules. This has helped them to do well in this market.
computer software / processing
BUY
Enghouse Systems
They buy smaller software companies. It sold off hard, now trading at 12x cash flow. They have a lot of cash, so they can buy shares or companies. They have many levers to create value. Buy now, during weakness.
computer software / processing
PAST TOP PICK
Enghouse Systems
(A Top Pick Nov 12/21, Down 47%) He missed on the timing. War chest of cash, multiples have come back to a point where management might start making acquisitions again. Good time to buy. One of those companies with a great balance sheet that will make it through the storm.
computer software / processing
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Enghouse Systems(ENGH-T) Rating

Ranking : 4 out of 5

Bullish - Buy Signals / Votes : 4

Neutral - Hold Signals / Votes : 2

Bearish - Sell Signals / Votes : 1

Total Signals / Votes : 7

Stockchase rating for Enghouse Systems is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.

Enghouse Systems(ENGH-T) Frequently Asked Questions

What is Enghouse Systems stock symbol?

Enghouse Systems is a Canadian stock, trading under the symbol ENGH-T on the Toronto Stock Exchange (ENGH-CT). It is usually referred to as TSX:ENGH or ENGH-T

Is Enghouse Systems a buy or a sell?

In the last year, 7 stock analysts published opinions about ENGH-T. 4 analysts recommended to BUY the stock. 1 analyst recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Enghouse Systems.

Is Enghouse Systems a good investment or a top pick?

Enghouse Systems was recommended as a Top Pick by on . Read the latest stock experts ratings for Enghouse Systems.

Why is Enghouse Systems stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.

Is Enghouse Systems worth watching?

7 stock analysts on Stockchase covered Enghouse Systems In the last year. It is a trending stock that is worth watching.

What is Enghouse Systems stock price?

On 2024-05-27, Enghouse Systems (ENGH-T) stock closed at a price of $28.75.