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eGain (EGAN) Moves 14% Higher: Will This Strength Last?

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eGain EGAN shares rallied 14% in the last trading session to close at $10.26. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 8% loss over the past four weeks.

The upswing in eGain’s share price can be attributed to impressive third-quarter fiscal 2021 results. Earnings of 5 cents per share beat the Zacks Consensus Estimate by 400%. Revenues increased 8% year over year to $19.7 million and surpassed the consensus mark by 5.9%. Markedly, SaaS revenues were up 14% year over year to $16.9 million.

Price and Consensus

Price Consensus Chart for EGAN
Price Consensus Chart for EGAN

This maker of customer engagement software is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of -75%. Revenues are expected to be $19.52 million, up 2.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For eGain, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on EGAN going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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