Latest news with #ePlus'
Yahoo
28-05-2025
- Business
- Yahoo
PLUS Q1 Earnings Call: Services Growth Offsets Product Decline, Management Cautious on Outlook
IT solutions provider ePlus (NASDAQ:PLUS) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 10.2% year on year to $498.1 million. Its non-GAAP EPS of $1.11 per share was 28.3% above analysts' consensus estimates. Is now the time to buy PLUS? Find out in our full research report (it's free). Operating Margin: 6.8%, up from 5.3% in the same quarter last year Market Capitalization: $1.85 billion ePlus' latest quarter reflected a shift in its revenue mix, as a decline in product sales was partially offset by robust growth in services. Management highlighted that demand for security, AI, and cloud offerings drove increased gross profit and margin expansion. CEO Mark Marron noted that the company's services-led approach, supported by strategic investments and acquisitions such as Bailiwick, resulted in higher gross margins and deeper customer relationships. While product sales faced headwinds from industry-wide shifts to subscription models and lingering macroeconomic uncertainty, services revenue—including managed and professional services—continued to grow rapidly. The company's focus on high-margin solution areas contributed to improved profitability, despite a challenging sales environment. Looking ahead, ePlus is positioning itself for further growth by expanding its capabilities in AI, security, and cloud services. Management remains cautious, citing persistent economic uncertainty and the ongoing customer transition to subscription-based revenue models. CEO Mark Marron stated, 'We are cautiously optimistic... but want to be prudent when considering the entire year and the trends we are experiencing with regard to ratable and netted down revenue.' The company expects continued strong demand for services, particularly as enterprise customers explore AI adoption through workshops and proof-of-concept offerings. However, management does not anticipate a significant acceleration in AI-driven infrastructure spending until later in the year or next year, and its forward guidance assumes some ongoing impact from economic headwinds. Management attributed the quarter's performance to the ongoing shift from product to services revenue, a more profitable business mix, and investments in high-growth technology areas. Economic uncertainty and the transition to subscription models also affected top-line results. Services revenue momentum: ePlus' services revenue, including professional and managed services, continued to grow at a rapid pace, with professional services benefiting from the Bailiwick acquisition and managed services bookings remaining strong. This shift is central to the company's strategy of deepening customer engagement and generating more predictable revenue streams. Product sales softness: The decline in product sales was largely attributed to industry-wide shifts toward subscription and ratable revenue models, as well as tough year-over-year comparisons given last year's supply chain-driven product deliveries. Management noted that some customers are still digesting prior networking equipment purchases, delaying new orders. Security and AI demand: Security-related offerings now represent a growing share of gross billings, reflecting heightened enterprise focus on digital risk mitigation. AI-driven workshops and envisioning sessions have received positive customer feedback, positioning ePlus for future growth as enterprise adoption of AI expands. Margin expansion: Gross margin improved significantly due to a higher mix of services revenue and products recognized on a net basis, as well as disciplined expense management. The company's operating margin also increased, helped by the more profitable business mix. Strategic investments and partnerships: ePlus has invested in AI expertise and infrastructure, including achieving NVIDIA DGX Ready SuperPOD and managed service provider specializations. These credentials support the company's capabilities in deploying enterprise-grade AI solutions and managing complex workloads. Management expects trends like services growth and AI adoption to shape revenue and profitability, while macroeconomic uncertainty and slower product spending remain key considerations. Enterprise AI adoption timing: While management sees long-term potential in AI, they believe most investment is currently concentrated with hyperscaler data centers, not enterprises. Broader enterprise spending on AI infrastructure is expected to pick up later this year or next, with current demand focused on workshops and pilot programs. Subscription model transition: ePlus anticipates continued headwinds from the industry shift toward ratable and subscription-based revenue models, which could dampen near-term product sales but support future growth and margin expansion as services become a larger part of the business. Economic and customer demand uncertainty: Management remains cautious due to ongoing macroeconomic uncertainty and slower decision-making among enterprise customers, especially in networking. Guidance assumes some continued impact from these headwinds, without factoring in a full recession scenario. In the coming quarters, the StockStory team will be watching (1) whether services revenue maintains its growth trajectory as enterprises continue to shift spending, (2) signs of recovery in networking product demand as customers complete equipment digestion, and (3) the pace at which enterprise AI adoption translates into infrastructure and consulting revenue. The company's ability to leverage its new AI partnerships and manage economic uncertainty will also be key for future performance. ePlus currently trades at a forward P/E ratio of 15.3×. In the wake of earnings, is it a buy or sell? Find out in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
Yahoo
24-05-2025
- Business
- Yahoo
ePlus Full Year 2025 Earnings: EPS Beats Expectations, Revenues Lag
Revenue: US$2.07b (down 7.0% from FY 2024). Net income: US$108.0m (down 6.7% from FY 2024). Profit margin: 5.2% (in line with FY 2024). EPS: US$4.07 (down from US$4.35 in FY 2024). We check all companies for important risks. See what we found for ePlus in our free report. All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue missed analyst estimates by 1.2%. Earnings per share (EPS) exceeded analyst estimates by 7.1%. Looking ahead, revenue is forecast to grow 2.3% p.a. on average during the next 2 years, compared to a 7.4% growth forecast for the Electronic industry in the US. Performance of the American Electronic industry. The company's share price is broadly unchanged from a week ago. Just as investors must consider earnings, it is also important to take into account the strength of a company's balance sheet. See our latest analysis on ePlus' balance sheet health. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
Is ePlus inc.'s (NASDAQ:PLUS) Latest Stock Performance A Reflection Of Its Financial Health?
ePlus' (NASDAQ:PLUS) stock is up by a considerable 13% over the past month. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. In this article, we decided to focus on ePlus' ROE. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. We check all companies for important risks. See what we found for ePlus in our free report. Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for ePlus is: 11% = US$105m ÷ US$962m (Based on the trailing twelve months to December 2024). The 'return' refers to a company's earnings over the last year. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.11 in profit. See our latest analysis for ePlus So far, we've learned that ROE is a measure of a company's profitability. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. At first glance, ePlus seems to have a decent ROE. Further, the company's ROE is similar to the industry average of 11%. Consequently, this likely laid the ground for the decent growth of 12% seen over the past five years by ePlus. We then performed a comparison between ePlus' net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 11% in the same 5-year period. Earnings growth is a huge factor in stock valuation. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). Doing so will help them establish if the stock's future looks promising or ominous. Is ePlus fairly valued compared to other companies? These 3 valuation measures might help you decide. Given that ePlus doesn't pay any regular dividends to its shareholders, we infer that the company has been reinvesting all of its profits to grow its business. On the whole, we feel that ePlus' performance has been quite good. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a sizeable growth in its earnings. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
01-05-2025
- Business
- Yahoo
ePlus (NASDAQ:PLUS) shareholders have earned a 13% CAGR over the last five years
It hasn't been the best quarter for ePlus inc. (NASDAQ:PLUS) shareholders, since the share price has fallen 21% in that time. But at least the stock is up over the last five years. Unfortunately its return of 87% is below the market return of 105%. Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business. We check all companies for important risks. See what we found for ePlus in our free report. There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. Over half a decade, ePlus managed to grow its earnings per share at 8.4% a year. This EPS growth is lower than the 13% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth. The image below shows how EPS has tracked over time (if you click on the image you can see greater detail). This free interactive report on ePlus' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further. ePlus shareholders are down 18% for the year, but the market itself is up 11%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 13% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Before spending more time on ePlus it might be wise to click here to see if insiders have been buying or selling shares. We will like ePlus better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
27-02-2025
- Business
- Yahoo
Be Wary Of ePlus (NASDAQ:PLUS) And Its Returns On Capital
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. However, after investigating ePlus (NASDAQ:PLUS), we don't think it's current trends fit the mold of a multi-bagger. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for ePlus, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.13 = US$138m ÷ (US$1.8b - US$697m) (Based on the trailing twelve months to December 2024). Thus, ePlus has an ROCE of 13%. On its own, that's a standard return, however it's much better than the 10% generated by the Electronic industry. Check out our latest analysis for ePlus In the above chart we have measured ePlus' prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for ePlus . In terms of ePlus' historical ROCE movements, the trend isn't fantastic. To be more specific, ROCE has fallen from 19% over the last five years. Meanwhile, the business is utilizing more capital but this hasn't moved the needle much in terms of sales in the past 12 months, so this could reflect longer term investments. It's worth keeping an eye on the company's earnings from here on to see if these investments do end up contributing to the bottom line. Bringing it all together, while we're somewhat encouraged by ePlus' reinvestment in its own business, we're aware that returns are shrinking. Since the stock has gained an impressive 75% over the last five years, investors must think there's better things to come. Ultimately, if the underlying trends persist, we wouldn't hold our breath on it being a multi-bagger going forward. If you're still interested in ePlus it's worth checking out our to see if it's trading at an attractive price in other respects. If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
