Topic: How To Invest

Q: Pat, can I get your take on Enghouse Systems (ENGH)?

Article Excerpt

A: Enghouse Systems Ltd., $25.28, symbol ENGH on Toronto, (Shares outstanding: 55.2 million; Market cap: $1.4 billion; www.enghouse.com) is a software and services provider. The company operates through two business groups: Interactive Management (59% of total revenue) sells software for managing customer interactions; and Asset Management (41% of revenue) offers technological solutions for network operators as well as software solutions for transit and transportation operators. Enghouse’s revenue fell 7.3%, from $503.8 million in 2020 (fiscal years ended October 31) to $467.2 million in 2021. That’s mainly because customers cut their spending on its services due to the COVID-19 shutdowns. Revenue fell another 8.5% to $427.6 million in 2022. However, revenue rebounded 6.2% to $454.0 million in 2023, and improved a further 10.7% to $502.5 million in 2024. The lower revenue also cut the company’s earnings by 6.2%, from $1.77 a share (or a total of $98.6 million) in 2020 to $1.66 a share (or $92.8 million) in 2021. Cost cuts and a tax…