What's Driving ePlus Inc's Surprising 20% Stock Rally?

ePlus Inc (PLUS, Financial) has been making waves in the stock market recently, with its stock price experiencing a significant surge. Over the past week, the company's stock price has seen a gain of 4.90%, and over the past three months, it has skyrocketed by 20.38%. The company's market cap stands at $1.76 billion, with its current price at $65.36. The GF Value, defined by GuruFocus.com, calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates. The GF Value of ePlus Inc is $63.04, compared to $59.09 three months ago. This indicates that the stock is currently fairly valued, whereas it was modestly undervalued three months ago.

Company Overview

ePlus Inc is a prominent player in the software industry. The company, through its subsidiaries, provides information technology solutions that enable organizations to optimize their IT environment and supply chain processes. ePlus Inc also offers consulting, professional and managed services, and complete lifecycle management services, including flexible financing solutions. The company primarily sells to medium and large enterprises in the United States and select international markets, including the United Kingdom, the European Union, India, Singapore, and Israel. 1707413780570308608.png

Profitability Analysis

When it comes to profitability, ePlus Inc ranks highly with a Profitability Rank of 9/10. The company's Operating Margin is 8.42%, which is better than 66.61% of the companies in the industry. The company's ROE is 17.57%, better than 81.53% of the companies, and its ROA is 8.94%, better than 80.96% of the companies. The ROIC of ePlus Inc is 12.45%, which is better than 75.49% of the companies in the industry. The company has also maintained profitability for the past 10 years, which is better than 99.96% of the companies. 1707413805522223104.png

Growth Prospects

ePlus Inc has a strong growth profile, with a Growth Rank of 10/10. The company's 3-Year Revenue Growth Rate per Share is 9.40%, which is better than 53.4% of the companies in the industry. The 5-Year Revenue Growth Rate per Share is 8.90%, better than 58.39% of the companies. The company's 3-Year EPS without NRI Growth Rate is 20.40%, better than 65.93% of the companies, and its 5-Year EPS without NRI Growth Rate is 17.80%, better than 62.32% of the companies. 1707413822043586560.png

Major Stock Holders

The top three holders of ePlus Inc's stock are Chuck Royce (Trades, Portfolio), who holds 186,295 shares (0.69% share percentage), HOTCHKIS & WILEY, who holds 133,064 shares (0.49% share percentage), and Paul Tudor Jones (Trades, Portfolio), who holds 15,050 shares (0.06% share percentage).

Competitive Landscape

ePlus Inc operates in a competitive industry, with its top three competitors being Agilysys Inc(AGYS, Financial) with a stock market cap of $1.7 billion, Zeta Global Holdings Corp(ZETA, Financial) with a stock market cap of $1.69 billion, and Clear Secure Inc(YOU, Financial) with a stock market cap of $1.62 billion.

Conclusion

In conclusion, ePlus Inc's stock performance has been impressive, with a significant price surge over the past three months. The company's strong profitability and growth prospects, coupled with its fair valuation, make it an attractive investment option. However, investors should also consider the competitive landscape and the holdings of major stockholders when making investment decisions. Overall, ePlus Inc's stock performance and potential make it a stock to watch in the software industry.

Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.