A strong stock as of late has been eGain (EGAN). Shares have been marching higher, with the stock up 39.6% over the past month. The stock hit a new 52-week high of $8.41 in the previous session. eGain has gained 31.3% since the start of the year compared to the 16.8% move for the Zacks Computer and Technology sector and the 22.7% return for the Zacks Internet - Software industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on September 4, 2025, eGain reported EPS of $0.09 versus consensus estimate of $0.07.
For the current fiscal year, eGain is expected to post earnings of $0.35 per share on $91.74 in revenues. This represents a 75% change in EPS on a 3.74% change in revenues.
Valuation Metrics
Though eGain has recently hit a 52-week high, what is next for eGain? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
eGain has a Value Score of C. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 31.6X. On a trailing cash flow basis, the stock currently trades at 22.7X versus its peer group's average of 27X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, eGain currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if eGain passes the test. Thus, it seems as though eGain shares could still be poised for more gains ahead.
How Does EGAN Stack Up to the Competition?
Shares of EGAN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is CLEAR Secure, Inc. (YOU). YOU has a Zacks Rank of #2 (Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. CLEAR Secure, Inc. beat our consensus estimate by 13.04%, and for the current fiscal year, YOU is expected to post earnings of $1.07 per share on revenue of $889.15 million.
Shares of CLEAR Secure, Inc. have gained 10.2% over the past month, and currently trade at a forward P/E of 34.35X and a P/CF of 20.3X.
The Internet - Software industry is in the top 31% of all the industries we have in our universe, so it looks like there are some nice tailwinds for EGAN and YOU, even beyond their own solid fundamental situation.
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eGain Corporation (EGAN): Free Stock Analysis Report CLEAR Secure, Inc. (YOU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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