EngageSmart Inc(NYSE:ESMT) stock Fundamental Analysis

Fundamental Rating

Taking everything into account, ESMT scores 5 out of 10 in our fundamental rating. ESMT was compared to 283 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.

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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.

1.2 Ratios

The Return On Assets of ESMT (2.68%) is better than 77.34% of its industry peers.

The Return On Equity of ESMT (2.95%) is better than 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 Rank	Sector 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

1.3 Margins

ESMT has a Profit Margin of 6.83%. This is amongst the best in the industry. ESMT outperforms 80.94% of its industry peers.

ESMT's Operating Margin of 6.37% is fine compared to the rest of the industry. ESMT outperforms 76.62% of its industry peers.

Looking at the Gross Margin, with a value of 77.08%, ESMT is in the better half of the industry, outperforming 73.38% of the companies in the same industry.

In the last couple of years the Gross Margin of ESMT has grown nicely.

		Industry Rank	Sector 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

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ESMT is destroying value.

ESMT has more shares outstanding than it did 1 year ago.

There is no outstanding debt for ESMT. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

An Altman-Z score of 27.53 indicates that ESMT is not in any danger for bankruptcy at the moment.

ESMT's Altman-Z score of 27.53 is amongst the best of 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 Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Altman-Z	27.53

ROIC/WACC0.22

WACC9.52%

2.3 Liquidity

A Current Ratio of 6.71 indicates that ESMT has no problem at all paying its short term obligations.

The Current ratio of ESMT (6.71) is better 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.

Looking at the Quick ratio, with a value of 6.71, ESMT belongs to the top of the industry, outperforming 91.73% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	6.71
Quick Ratio	6.71

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ESMT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.17%, which is quite impressive.

The Revenue has grown by 29.41% in the past year. This is a very strong growth!

ESMT shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 54.50% yearly.

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

ESMT is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.41% yearly.

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

Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 74.35 indicates a quite expensive valuation of ESMT.

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.

When comparing the Price/Earnings ratio of ESMT to the average of the S&P500 Index (26.70), we can say ESMT is valued expensively.

The Price/Forward Earnings ratio is 66.46, which means the current valuation is very expensive for ESMT.

Compared to the rest of the industry, the Price/Forward Earnings ratio of ESMT is on the same level as its industry peers.

The average S&P500 Price/Forward Earnings ratio is at 22.49. ESMT is valued rather expensively when compared to this.

		Industry Rank	Sector Rank
PE	74.35
Fwd PE	66.46

4.2 Price Multiples

ESMT's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ESMT is cheaper than 67.63% of the companies in the same industry.

The rest of the industry has a similar Price/Free Cash Flow ratio as ESMT.

		Industry Rank	Sector Rank
P/FCF	74.93
EV/EBITDA	82.01

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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5. Dividend

5.1 Amount

ESMT does not give a dividend.

		Industry Rank	Sector 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 SectorInformation Technology

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 Rank	Sector 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 Rank	Sector 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 Rank	Sector 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 Rank	Sector 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

EngageSmart Inc (ESMT) Stock Fundamental Analysis

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

More info and screens

2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

More info and screens

3. Growth

3.1 Past

3.2 Future

3.3 Evolution

More info and screens

4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

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5. Dividend

5.1 Amount

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