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eGain (EGAN) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research

eGain Corporation EGAN is slated to report second-quarter fiscal 2019 results on Feb 7.

Notably, the company beat the Zacks Consensus Estimate in all the trailing four quarters, recording average positive surprise of 105.6%.

In the last reported quarter, the company reported adjusted earnings of 4 cents per share, up from 1 cent in the year-ago quarter. Revenues were $15.7 million, up 8% from the year-ago quarter.

Notably, the Zacks Consensus Estimate for second-quarter fiscal 2019 earnings has remained stable at 1 cent over the past seven days. The figure indicates a decline of 50% year over year.

Nevertheless, the consensus mark for revenues, which is pegged at $16.2 million, indicates an increase of 5.3% year over year.

eGain Corporation Price and EPS Surprise

eGain Corporation Price and EPS Surprise | eGain Corporation Quote

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

eGain’s customer engagement solutions are witnessing increasing adoption in this digital transformation era. The company’s virtual assistants and knowledge management and artificial intelligence (AI) solutions are the two big drivers of new bookings.

Additionally, eGain is expected to benefit from the partnerships with the likes of Cisco, Avaya and Amazon Connect. Moreover, it is winning customers on a regular basis. In the soon-to-be reported quarter, Altitude Software chose eGain’s AI and knowledge management solutions to enhance customer experience and boost operational productivity.

The partnerships are expected to aid Software-as-a-Service (SaaS) revenues in second-quarter fiscal 2019. Notably, in first-quarter fiscal 2019 SaaS revenues increased 40% year over year to $9.7 million.

Additionally, eGain’s AI Value in 30 Days program is expected to boost its competitive position and aid top-line growth in second-quarter fiscal 2019. The company’s AI program is capable of delivering value to businesses in 30 days or less as opposed to programs that take longer to add to business value. Moreover, the program is likely to win orders for eGain.

In first-quarter fiscal 2019, eGain won orders from a variety of industries including financial services, loan portfolio management and banking services to name a few. Moreover, a digital brand retailer switched from Zendesk ZEN to eGain’s scalable and comprehensive solutions.

We believe that growing partnerships coupled with the increasing demand for customer engagement solutions will aid the adoption of eGain’s solutions. This, in turn, will boost top- line growth.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

eGain has a Zacks Rank #2 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies you may want to consider as our model shows that these have the right combination of elements to post earnings beat in their upcoming releases:

Twitter TWTR has an Earnings ESP of +13.03% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

HubSpot, Inc. HUBS has an Earnings ESP of +2.3% and a Zacks Rank #2.

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