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E2open Delivers Mixed Q2 Results; Shares Drop

Shares of E2open Parent Holdings, Inc. (ETWO) declined 4% in Wednesday’s extended trading session after the company delivered mixed results for the second quarter of Fiscal 2022 (ended August 31, 2021).

The company provides a cloud-based, end-to-end supply-chain management SaaS platform in America, Europe, and the Asia Pacific. (See E2open stock chart on TipRanks)

E2open reported a net loss of $0.11 per share in Q2, which lagged the Street’s estimate of breakeven. However, adjusted revenues jumped 12.8% to $92.3 million, topping analyst expectations of $91 million, mainly due to growth in all segments.

Segment-wise, the company’s subscription revenue surged 10% year-over-year, and revenue from the professional services segment grew 27.9%.

E2open CEO Michael Farlekas said, “Due to our strong performance and accelerating momentum in the first half of our fiscal 2022, we are reaffirming our revenue guidance which we raised on September 1st. We also acquired BluJay Solutions and we are excited to share our combined capabilities with our customers and welcome BluJay’s talented team to E2open.”

Total adjusted revenue in Fiscal 2022 is expected to be in the range of $470 million to $474 million, reflecting a more than 10% growth rate. Also, adjusted EBITDA is anticipated to be between $161 million and $163 million, up from the prior guidance of $158 million provided during the BluJay transaction announcement.

Notably, total synergies related to the recent BluJay combination are likely to be $25 million compared to the $20 million announced previously. The company expects to achieve between 50 to 60% run-rate savings by the end of Fiscal 2022. (See Insiders’ Hot Stocks on TipRanks)

On October 11, Loop Capital Markets analyst Yun Kim initiated coverage of E2open with a Buy rating and a price target of $16 (39.5% upside potential).

Based on 2 Buys and 2 Holds, the stock has a Moderate Buy consensus rating. The average E2open price target of $15 implies 30.8% upside potential from current levels. Shares have gained 12.6% over the past year.

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