EGAN - eGain stock falls to over 2-year low on tempered guidance amid currency headwinds

eGain ( NASDAQ: EGAN ) stock dropped to its lowest in over two years on Friday after the software firm issued conservative outlook in its earnings report due to currency and macro headwinds.

EGAN expects Q1 adj. EPS $0.01 and revenue of $24M-$24.5M, up 12-14% Y/Y (or up 17-19% in constant currency).

The firm projects FY23 adj. EPS of $0.12-$0.15 and revenue of $101M-$103M, up 10-12% Y/Y (or up 12-15% in constant currency).

Craig Hallum cut its price target on EGAN to $14 from $18 (potential upside of 58.6% to last close) to reflect reduced peer valuations and the management's softer guidance.

But the brokerage reaffirmed its Buy rating on strong demand, improving overall execution and increased sales capacity.

"Forward guidance will get scrutiny as it calls for 13.5% constant currency top line growth at the mid-point vs. 15-20% the team said to expect in the near to intermediate term," analyst Jeff Van Rhee wrote in a note to clients.

The guidance factors in pricing pressure and longer sales cycles, both of which Rhee said are yet to be seen.

"While we suspect the guide is overly conservative, investors will have to wait until next quarter for evidence," he added.

Craig Hallum's Buy rating is in line with bullish sell-side ratings .

But SA Quant's rating on EGAN is Hold as the stock scored poorly in factor grades growth and valuation.

Shares of EGAN declined 21.3% YTD.

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