Canadian software and services company Enghouse Systems Limited (TSE:ENGH) recently reported disappointing third-quarter Fiscal 2022 earnings results. The company reported a net income of C$18.1 million, or C$0.33 per share, that compared unfavorably with the year-ago figure of C$21.2 million, or $0.38 per share. The metric also lags analysts’ estimate of C$0.34 per share.
The top-line number of C$102.1 million in third-quarter Fiscal 2022 was down from the previous year’s tally of C$117.6 million. The downside was largely due to unfavorable currency movements. Also, continuous market transition to software as a service (“SaaS”) cloud offerings from on-premise perpetual licensing within the company’s Interactive Management Group (IMG) business impacted revenues in the quarter.
The company recorded C$34.1 million in cash flows from operating activities without changes in working capital, comparing unfavorably with the year-ago figure of C$41.1 million.
Enghouse exited the third quarter of 2022 with cash, cash equivalents, and short-term investments of C$229.5 million and without any external debt. During the reported quarter, the software and services company concluded two acquisitions for C$6.1 million, paid quarterly dividends of C$10.3 million, and repurchased C$9.0 million of shares.
Is Enghouse Stock a Good Buy?
Nonetheless, ENGH stock seems like a good investment option. According to TipRanks, the Street has a Strong Buy consensus rating on the stock, which is based on four Buys and one Hold.
Further, TipRanks data shows that financial bloggers are 100% Bullish on ENGH stock, in comparison to the sector average of 65%.
Final Thoughts
Enghouse has already been having a tough time on the bourses, as the shares of the stock are down 27.2% so far in 2022. Further, ENGH stock’s average stock price of C$31.63, signals a 3.8% decline from the current levels. However, the recently concluded buyouts are expected to boost the company’s contact center offerings and widen its cloud-hosted solutions portfolio.
Read full Disclosure
