E2open Parent Holdings, Inc. ($ETWO) Earnings (Q2 FY23)

 E2open Parent Holdings, Inc. ($ETWO) Earnings and Opinion:


E2open is a company in the Technology sector and operates in the Software-Application industry. The company provides cloud-based and end-to-end supply chain management SaaS platform in the Americas, Europe, and Asia Pacific. E2open was incorporated in 2020 and is currently headquartered in Austin, Texas. The company made its IPO in June of 2020. 

E2open Parent Holdings Financial Results:

  • Revenue of $160.68M missing expectations of $162.60M
  • Gross Margin of 66.5% missing expectations of 69.23%
  • Operating Income of -$5.74M missing expectations of $41M
  • Pre-Tax Income of -$540.09M missing expectations of $24.4M
  • Diluted EPS, GAAP of -$1.22 missing expectations of -$0.07
Opinion:
E2open is current trading lower in todays trading session, down about 4%. The company reported earnings after the market closed yesterday. One of the main highlights of this report was the subscription revenue. The company saw an 11% year over year growth in this category, which is a "primary indicator of durable client relationships". E2open indicated that they are maintaining their fiscal 2023 EBITDA guidance, which shows a commitment to driving profitability and revenue growth. As far as the overall earnings report goes, it was not too hot at all. Operating income missed their expectations by 114%. Pre Tax Income missed on their earnings expectations by over 2,000%. Also, the Diluted EPS, GAAP metric missed expectations by over 1,500%. I get this company is very small, and is just making a start. However, you have to think they are misleading a little bit with all of the guidance they are putting out. I agree that it is a wonderful business model, especially with the current economic situation with supply chain issues. However, when you have misses this bad, we know something could be up here. As far as valuation goes, the P/E ratio sits at around 20 and P/S sits at around 3.23. EV/EBITDA is at 15.69 and EV/Sales is at 4.34. We have some decent valuation here, with some of the metrics up at the top compared with competitors. In my opinion, I love the business model of this company, but I want to see what they can do with customer retention. I feel like it is a popular business model in the current times of supply chain issues. However, how do we think the company will perform when the supply chain issues finally returns to a bit of normalcy. I think it could go either of two ways, but investing in this stock is risking a lot. If you have a couple dollars laying around and want potential for a big return, you could maybe look at throwing a little bit into E2open. For now, I am going to stay out of this one until I can see some better performance compared to their guidance. 


*Information from Bloomberg, Yahoo Finance

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