Shares of eGain Corp (NASDAQ:EGAN) soared Friday after the cloud application company swung to a profit in its fiscal second quarter and whizzed past analysts’ estimates.
In its latest quarter ended December 31, the Sunnyvale, California-based company reported net income of $2 million, or $0.07 per share, on revenue of $17.7 million. The results trounced the estimates of Wall Street’s analysts who had called for the company to break-even on sales of $16.28 billion.
Investors applauded the news, sending eGain shares up 21% to $9.00 before the opening bell on Thursday.
Analyst Richard Baldry of Roth Capital Partners was also bullish on the results, keeping a Buy rating on the stock along with an $18 price target.
"EGAN's 2QF19 results were well above our forecasts for both revenues and adjusted earnings, leaving a clear view that the company is gaining momentum," Baldry wrote in a note to investors. "By contrast, its shares are down over 60% from their 52-week highs even as revenues and earnings have set new highs. ... [We] believe EGAN warrants a sharply higher valuation."
The quarterly showing also compares well to the year-ago quarter when eGain reported a loss of $788,000 on sales of $15.4 million.
Revenue from SaaS (software as a service) was a bright spot, climbing 53% year-over-year to $15.8 million.
Subscription revenue, which includes SaaS and legacy support sales, rose 25% year-over-year to $15.8 million, accounting for 89% of total sales.
eGain specializes in providing cloud applications for social media as well as for mobile phones and the web.
Contact Ellen Kelleher at [email protected]