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EGain (EGAN) Gains As Market Dips: What You Should Know

Zacks Equity Research
HMS Holdings (HMSY) delivered earnings and revenue surprises of 24.00% and -0.20%, respectively, for the quarter ended December 2018. Do the numbers hold clues to what lies ahead for the stock?

eGain (EGAN) closed at $7.11 in the latest trading session, marking a +0.85% move from the prior day. This change outpaced the S&P 500's 0.79% loss on the day. Elsewhere, the Dow lost 0.85%, while the tech-heavy Nasdaq lost 1.11%.

Heading into today, shares of the maker of customer engagement software had gained 5.07% over the past month, lagging the Computer and Technology sector's gain of 12.9% and the S&P 500's gain of 13.44% in that time.

Wall Street will be looking for positivity from EGAN as it approaches its next earnings report date. This is expected to be February 14, 2019. On that day, EGAN is projected to report earnings of $0.01 per share, which would represent a year-over-year decline of 50%. Meanwhile, our latest consensus estimate is calling for revenue of $16.21 million, up 5.26% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.08 per share and revenue of $65.71 million. These totals would mark changes of +33.33% and +7.18%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for EGAN. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. EGAN is currently a Zacks Rank #2 (Buy).

In terms of valuation, EGAN is currently trading at a Forward P/E ratio of 88.13. Its industry sports an average Forward P/E of 51.5, so we one might conclude that EGAN is trading at a premium comparatively.

We can also see that EGAN currently has a PEG ratio of 2.94. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry currently had an average PEG ratio of 2.6 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 24, putting it in the top 10% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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