SUNNYVALE, Calif. – eGain (NASDAQ:EGAN) Corporation (NASDAQ:EGAN), a provider of AI-driven knowledge platforms for customer service, has announced an expansion of its stock repurchase program. The company's Board of Directors has approved a $20 million increase, doubling the total program from $20 million to $40 million in potential buybacks of its outstanding common stock.
CEO Ashu Roy stated that the company's robust financial position enables it to enhance shareholder value, indicating a belief that the current share price does not reflect the company's true value. Roy also expressed confidence in the market opportunities for AI knowledge platforms.
As of May 23, 2024, eGain had repurchased approximately $19.3 million worth of its common stock, leaving nearly $20.7 million available for further repurchases after the program's expansion. The Board has also extended the duration of the repurchase initiative, which will continue until the set aggregate amount is bought back or the Board decides to end the program.
The repurchases may be conducted in the open market or through privately negotiated transactions, based on a range of factors, including market conditions and stock price. The company has the option to execute repurchases under a Rule 10b5-1 plan, allowing transactions at times when they might otherwise be restricted by insider trading laws.
eGain's stock repurchase program does not commit the company to buy a specific number of shares and can be adjusted, paused, or terminated at any time at eGain's discretion. The funding for the buybacks will come from existing cash balances or future cash flow.
The announcement contains forward-looking statements, and the company cautions that various risks, uncertainties, and assumptions could cause actual outcomes to differ from those projected.
This news is based on a press release statement from eGain Corporation.
InvestingPro Insights
eGain Corporation (NASDAQ:EGAN), with its recent announcement to enhance its stock repurchase program, is demonstrating a confidence that resonates with some of the insights gleaned from InvestingPro data. The company’s management has shown a commitment to shareholder value through aggressive share buybacks, as reflected in the doubling of its repurchase program. This aligns with an InvestingPro Tip that notes management's assertive approach to repurchasing shares.
From a financial health perspective, eGain holds a strong position, as indicated by another InvestingPro Tip highlighting that the company holds more cash than debt on its balance sheet. This is a significant factor for investors considering the stability and potential for growth of the company. Additionally, eGain's liquid assets surpass its short-term obligations, providing further evidence of financial resilience.
InvestingPro data shows a market capitalization of $176.87 million USD and a Price to Earnings (P/E) ratio of 21.02. While the company has seen a slight decline in revenue growth over the last twelve months as of Q3 2024, with a -1.97% change, its gross profit margin remains high at 71.18%, suggesting efficient cost management and a strong business model. Moreover, the company's fair value is estimated at $8.2 USD by InvestingPro, which is above the previous close price of $5.93 USD, hinting at a potential undervaluation of eGain's shares.
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