Enghouse Systems Ltd. (ENGH) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

The Descartes Systems Group, Inc.

Lumine Group, Inc.

BlackBerry Ltd.

Docebo, Inc.

Kinaxis, Inc.

Enghouse Systems Ltd.

Constellation Software, Inc.

Open Text Corp.

Topicus.com, Inc.

Lightspeed Commerce, Inc.

Dye & Durham Ltd.

Why is Enghouse Systems Ltd. ?

High Management Efficiency with a high ROE of 17.24%

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 90.58

Poor long term growth as Operating profit has grown by an annual rate -4.36% of over the last 5 years

Flat results in Apr 25

ROCE(HY) Lowest at 13.39%
INTEREST COVERAGE RATIO(Q) Lowest at 18,429.68
OPERATING PROFIT(Q) Lowest at CAD 28.57 MM

With ROE of 13.10%, it has a fair valuation with a 1.92 Price to Book Value

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -37.19%, its profits have fallen by -7.2%

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -37.19% returns in the last 1 year, the stock has also underperformed S&P/TSX 60 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Enghouse Systems Ltd. should be less than 10%
Overall Portfolio exposure to Software Products should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Software Products)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Enghouse Systems Ltd. for you?

Medium Risk, Low Return

Absolute

Risk Adjusted

Volatility

Enghouse Systems Ltd.

-100.0%

-1.01

27.82%

S&P/TSX 60

21.87%

1.54

14.62%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

-0.68%

EBIT Growth (5y)

-6.75%

EBIT to Interest (avg)

90.58

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.43

Sales to Capital Employed (avg)

0.83

Tax Ratio

19.65%

Dividend Payout Ratio

89.84%

Pledged Shares

Institutional Holding

0.04%

ROCE (avg)

34.21%

ROE (avg)

17.24%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.43

EV to EBIT

6.68

EV to EBITDA

4.78

EV to Capital Employed

1.75

EV to Sales

1.21

PEG Ratio

Dividend Yield

ROCE (Latest)

26.11%

ROE (Latest)

12.31%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Dow Theory

Mildly Bearish

OBV

No Trend

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

6What is working for the Company

DIVIDEND PER SHARE(HY)

Highest at CAD 5.5

DIVIDEND PAYOUT RATIO(Y)

Highest at 78.62%

RAW MATERIAL COST(Y)

Fallen by -1.9% (YoY

CASH AND EQV(HY)

Highest at CAD 540.67 MM

DEBTORS TURNOVER RATIO(HY)

Highest at 5.5 times

-4What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at CAD 104.64 MM

ROCE(HY)

Lowest at 12.22%

Here's what is working for Enghouse Systems Ltd.

Dividend per share

Highest at CAD 5.5 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (CAD)

Cash and Eqv

Highest at CAD 540.67 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debtors Turnover Ratio

Highest at 5.5 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Dividend Payout Ratio

Highest at 78.62%

in the last five years

MOJO Watch

Company is distributing higher proportion of profits generated as dividend

DPR (%)

Raw Material Cost

Fallen by -1.9% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Enghouse Systems Ltd.

Operating Cash Flow

Lowest at CAD 104.64 MM

in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (CAD MM)