Canada's Enghouse misses Q3 revenue estimates

Overview

• Enghouse Q3 revenue falls 3.8% yr/yr, missing analysts' expectations

• Adjusted EBITDA for Q3 misses estimates

• Co maintains strong cash position with C$271.6 mln, no external debt

Outlook

• Enghouse plans to continue cost management measures to improve profitability

• Company aims to leverage cash resources for acquisitions

• Company sees ongoing macroeconomic uncertainty impacting market conditions

Result Drivers

• RECURRING REVENUE - Recurring revenue, including SaaS and maintenance services, accounted for 69.9% of total revenue, with a slight increase for the nine-month period

• COST ALIGNMENT - Strategic cost alignment and acquisition restructuring efforts led to special charges of approximately C$3.0 mln

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy."

• Wall Street's median 12-month price target for Enghouse Systems Ltd is C$25.50, about 11.9% above its September 3 closing price of C$22.46

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 17 three months ago

Press Release: ID:nCNW3x58sa