Applying AI to their business products is where firms can gain an edge in the AI race. eGain (EGAN) is doing just that, and revitalizing its customer knowledge business in the process. Let’s take a have a look at this stock that just released its latest earnings.
Releasing earnings on Thursday, eGain (EGAN) appears to be in turnaround mode. In keeping with CEO Ashu Roy, the company was seeing stalled deals in the first half of the yr, but “we are actually seeing many of those deals re-engaging and latest RFPs launching with urgency and intent.”
EGAN provides a customer engagement platform that gives client agents with information at their fingertips when their customers contact them with issues. The corporate counts amongst its many shoppers, L.L. Bean, Lands’ End, and even the IRS.
eGain recently began deploying AI into its knowledge management systems, and now has a complete suite of “Knowledge + AI” products that may either be utilized by a customer agent, or provide self service options to customer clients who wish to bypass the human interaction.
These AI enhanced tools are particularly critical presently, as call center employees currently are experiencing each large turnover, estimated in the overall industry at over 30%, and more complex customer inquiries. An eGain sponsored survey of call center agents found that 63% of 456 surveyed said the questions they now receive are more complicated than in the past.
EGAN ranks very highly on the Quality metric of our POWR Rankings outpacing over 93.5% of all stocks in the database. The corporate has a stellar A rating overall, rating in the top 15 stocks of all the stocks we track.
EGAN is trading at just 2.5x money, and has gross margins of that top 70%. Its enterprise value (EV) to sales is just 1.29, and the company has almost no debt, very unusual for a tech company at this stage. The truth is, in the latest quarter the company actually repurchased almost $5 million of its common stock, and has over $73 million in money or money equivalents readily available.
CEO Roy is enthusiastic about the interest being raised by generative AI, and said it’s “rejuvenating interest in knowledge platforms, and it will drive demand for our products in fiscal 2024” (the company’s fiscal yr ended with the recent quarter).
With all the hype around AI, this is precisely the kind of stock that attracts my interest. One which is definitely using AI to boost its product offerings, and drive latest contract interest.
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EGAN shares were unchanged in after-hours trading Friday. Yr-to-date, EGAN has declined -35.77%, versus a 16.81% rise in the benchmark S&P 500 index during the same period.
About the Writer: Jay Soloff
Jay is the lead Options Portfolio Manager at Investors Alley. He’s the editor of Options Floor Trader PRO, an investment advisory bringing you skilled options trading strategies. Jay was formerly an expert options market maker on the floor of the CBOE and has been trading options for over twenty years.
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