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Why E2open (EOPN) Could Be Positioned for a Slump?

Zacks Equity Research

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is E2open, Inc. (EOPN), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in EOPN.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 2 estimates moving down in the past 30 days, compared with no upward revision. This trend has caused the loss estimate to trend wider, going from 62 cents a share a month ago to its current level of 78 cents.

Also, for the current quarter, EOPN has seen 2 downward estimate revisions versus no revision in the opposite direction, dragging the loss estimate down to 25 cents a share from 17 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 17.44% in the past month.

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Internet Software industry, you may instead consider some better-ranked stocks including Rally Software Development Corp. (RALY), Textura Corporation (TXTR) and F5 Networks, Inc. (FFIV).Among these stocks, Rally Software and Textura Corporation hold a Zacks Rank #1 (Strong Buy) and F5 Networks holds a Zacks Rank #2 (Buy). With favorable Zacks Ranks, these stocks may be better selections at this time.

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E2OPEN INC (EOPN): Free Stock Analysis Report


TEXTURA CORP (TXTR): Free Stock Analysis Report

F5 NETWORKS INC (FFIV): Free Stock Analysis Report

Zacks Investment Research