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EngageSmart Inc (ESMT) Stock Fundamental Analysis

USA - NYSE:ESMT - US29283F1030 - Common Stock

23.05 USD
-0.02 (-0.09%)
Last: 1/25/2024, 8:19:29 PM
23.09 USD
+0.04 (+0.17%)
After Hours: 1/25/2024, 8:19:29 PM
Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to ESMT. ESMT was compared to 279 industry peers in the Software industry. ESMT has an excellent financial health rating, but there are some minor concerns on its profitability. ESMT is valued quite expensive, but it does show an excellent growth.


Dividend Valuation Growth Profitability Health

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4

1. Profitability

1.1 Basic Checks

ESMT had positive earnings in the past year.
ESMT had a positive operating cash flow in the past year.
ESMT Yearly Net Income VS EBIT VS OCF VS FCFESMT Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2019 2020 2021 2022 0 20M -20M 40M -40M

1.2 Ratios

ESMT has a better Return On Assets (2.68%) than 77.34% of its industry peers.
ESMT has a Return On Equity of 2.95%. This is in the better half of the industry: ESMT outperforms 76.26% of its industry peers.
With a decent Return On Invested Capital value of 2.11%, ESMT is doing good in the industry, outperforming 74.46% of the companies in the same industry.
Industry RankSector Rank
ROA 2.68%
ROE 2.95%
ROIC 2.11%
ROA(3y)0.02%
ROA(5y)N/A
ROE(3y)-0.06%
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ESMT Yearly ROA, ROE, ROICESMT Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2019 2020 2021 2022 0 -5 -10

1.3 Margins

ESMT's Profit Margin of 6.83% is amongst the best of the industry. ESMT outperforms 80.94% of its industry peers.
With a decent Operating Margin value of 6.37%, ESMT is doing good in the industry, outperforming 76.62% of the companies in the same industry.
ESMT's Gross Margin of 77.08% is fine compared to the rest of the industry. ESMT outperforms 73.38% of its industry peers.
In the last couple of years the Gross Margin of ESMT has grown nicely.
Industry RankSector Rank
OM 6.37%
PM (TTM) 6.83%
GM 77.08%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3%
GM growth 5YN/A
ESMT Yearly Profit, Operating, Gross MarginsESMT Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2019 2020 2021 2022 0 50 -50

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8

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ESMT is destroying value.
The number of shares outstanding for ESMT has been increased compared to 1 year ago.
ESMT has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
ESMT Yearly Shares OutstandingESMT Yearly Shares OutstandingYearly Shares Outstanding 2019 2020 2021 2022 50M 100M 150M
ESMT Yearly Total Debt VS Total AssetsESMT Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2019 2020 2021 2022 200M 400M 600M 800M

2.2 Solvency

An Altman-Z score of 27.53 indicates that ESMT is not in any danger for bankruptcy at the moment.
ESMT has a Altman-Z score of 27.53. This is amongst the best in the industry. ESMT outperforms 98.56% of its industry peers.
ESMT has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0
Altman-Z 27.53
ROIC/WACC0.22
WACC9.52%
ESMT Yearly LT Debt VS Equity VS FCFESMT Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2019 2020 2021 2022 0 200M 400M 600M 800M

2.3 Liquidity

ESMT has a Current Ratio of 6.71. This indicates that ESMT is financially healthy and has no problem in meeting its short term obligations.
ESMT has a better Current ratio (6.71) than 91.73% of its industry peers.
ESMT has a Quick Ratio of 6.71. This indicates that ESMT is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 6.71, ESMT belongs to the best of the industry, outperforming 91.73% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 6.71
Quick Ratio 6.71
ESMT Yearly Current Assets VS Current LiabilitesESMT Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2019 2020 2021 2022 100M 200M 300M

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8

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 29.17% over the past year.
The Revenue has grown by 29.41% in the past year. This is a very strong growth!
The Revenue has been growing by 54.50% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)29.17%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%22.22%
Revenue 1Y (TTM)29.41%
Revenue growth 3Y54.5%
Revenue growth 5YN/A
Sales Q2Q%24.02%

3.2 Future

The Earnings Per Share is expected to grow by 20.41% on average over the next years. This is a very strong growth
Based on estimates for the next years, ESMT will show a very strong growth in Revenue. The Revenue will grow by 23.24% on average per year.
EPS Next Y20.63%
EPS Next 2Y15.49%
EPS Next 3Y20.41%
EPS Next 5YN/A
Revenue Next Year27.7%
Revenue Next 2Y24.84%
Revenue Next 3Y23.24%
Revenue Next 5YN/A

3.3 Evolution

The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
ESMT Yearly Revenue VS EstimatesESMT Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M 400M 500M
ESMT Yearly EPS VS EstimatesESMT Yearly EPS VS EstimatesYearly EPS VS Estimates 2021 2022 2023 2024 2025 0.1 0.2 0.3 0.4

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2

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 74.35, the valuation of ESMT can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of ESMT indicates a somewhat cheap valuation: ESMT is cheaper than 60.79% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.41. ESMT is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 66.46, ESMT can be considered very expensive at the moment.
ESMT's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.87. ESMT is valued rather expensively when compared to this.
Industry RankSector Rank
PE 74.35
Fwd PE 66.46
ESMT Price Earnings VS Forward Price EarningsESMT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ESMT indicates a somewhat cheap valuation: ESMT is cheaper than 67.63% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as ESMT.
Industry RankSector Rank
P/FCF 74.93
EV/EBITDA 82.01
ESMT Per share dataESMT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 1 2 3 4 5

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as ESMT's earnings are expected to grow with 20.41% in the coming years.
PEG (NY)3.6
PEG (5Y)N/A
EPS Next 2Y15.49%
EPS Next 3Y20.41%

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0

5. Dividend

5.1 Amount

ESMT does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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EngageSmart Inc

NYSE:ESMT (1/25/2024, 8:19:29 PM)

After market: 23.09 +0.04 (+0.17%)

23.05

-0.02 (-0.09%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)11-02 2023-11-02/bmo
Earnings (Next)02-13 2024-02-13/amc
Inst Owners0.09%
Inst Owner Change0%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap3.88B
Analysts52.31
Price Target23.46 (1.78%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)38.72%
Min EPS beat(2)8.93%
Max EPS beat(2)68.5%
EPS beat(4)3
Avg EPS beat(4)19.11%
Min EPS beat(4)-7.51%
Max EPS beat(4)68.5%
EPS beat(8)7
Avg EPS beat(8)48.74%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)-0.24%
Min Revenue beat(2)-0.63%
Max Revenue beat(2)0.16%
Revenue beat(4)2
Avg Revenue beat(4)0%
Min Revenue beat(4)-0.63%
Max Revenue beat(4)0.57%
Revenue beat(8)6
Avg Revenue beat(8)2.18%
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-21.17%
EPS NY rev (1m)0%
EPS NY rev (3m)2.93%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)0.43%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)0.57%
Valuation
Industry RankSector Rank
PE 74.35
Fwd PE 66.46
P/S 10.65
P/FCF 74.93
P/OCF 63.98
P/B 4.61
P/tB 10.86
EV/EBITDA 82.01
EPS(TTM)0.31
EY1.34%
EPS(NY)0.35
Fwd EY1.5%
FCF(TTM)0.31
FCFY1.33%
OCF(TTM)0.36
OCFY1.56%
SpS2.17
BVpS5
TBVpS2.12
PEG (NY)3.6
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 2.68%
ROE 2.95%
ROCE 2.67%
ROIC 2.11%
ROICexc 3.64%
ROICexgc 93.16%
OM 6.37%
PM (TTM) 6.83%
GM 77.08%
FCFM 14.21%
ROA(3y)0.02%
ROA(5y)N/A
ROE(3y)-0.06%
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3%
GM growth 5YN/A
F-Score7
Asset Turnover0.39
Health
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0
Debt/EBITDA 0
Cap/Depr 45.16%
Cap/Sales 2.43%
Interest Coverage 92.92
Cash Conversion 141.52%
Profit Quality 208.12%
Current Ratio 6.71
Quick Ratio 6.71
Altman-Z 27.53
F-Score7
WACC9.52%
ROIC/WACC0.22
Cap/Depr(3y)30.6%
Cap/Depr(5y)N/A
Cap/Sales(3y)2.64%
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)29.17%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%22.22%
EPS Next Y20.63%
EPS Next 2Y15.49%
EPS Next 3Y20.41%
EPS Next 5YN/A
Revenue 1Y (TTM)29.41%
Revenue growth 3Y54.5%
Revenue growth 5YN/A
Sales Q2Q%24.02%
Revenue Next Year27.7%
Revenue Next 2Y24.84%
Revenue Next 3Y23.24%
Revenue Next 5YN/A
EBIT growth 1Y112.73%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year66.52%
EBIT Next 3Y38.68%
EBIT Next 5YN/A
FCF growth 1Y130%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y114.25%
OCF growth 3YN/A
OCF growth 5YN/A