Breaking Down ePlus inc. (PLUS) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments? Ever wonder if you're truly grasping the financial strength of the companies you're backing? Let's dive into ePlus inc. (PLUS), a leading provider of technology and financing solutions. While the stock price has seen a dip of 19% over the last three months, is it a temporary setback or a sign of deeper issues? Despite a decrease in net sales by 6.0% to $1,570.7 million for the first nine months of fiscal year 2025, the company's gross margin actually increased to 27.0%. Could this be a signal of underlying strength? With a moderate 12% growth over the past five years and a decent Return on Equity (ROE) of 11%, is poised for long-term gains, or are there hidden risks lurking beneath the surface? Read on to uncover key insights that can help you make informed decisions.

ePlus inc. (PLUS) Revenue Analysis

ePlus inc. (PLUS) showcases a diversified revenue model, drawing from various streams including technology products, professional services, managed services, and security solutions. Understanding these streams is crucial for investors to gauge the company’s stability and growth potential. A comprehensive look into the most recent fiscal year provides insights into how each segment contributes to the overall financial health of ePlus inc.

In the fiscal year 2024, ePlus inc. reported net sales of $2.2 billion, marking a 14.1% increase compared to the $1.9 billion reported in the previous fiscal year. This growth reflects strong performance across its key revenue streams. The company's ability to increase revenue year-over-year indicates a solid demand for its offerings and effective market strategies.

Here’s a breakdown of ePlus inc.’s revenue streams:

• Technology Products: This segment includes sales of hardware and software, which forms a significant portion of ePlus inc.'s revenue.
• Professional Services: Revenue is generated from providing consulting, design, and implementation services related to IT infrastructure.
• Managed Services: This involves ongoing management and support of IT systems for clients.
• Security Solutions: A growing area that includes sales and services related to cybersecurity products and solutions.

A more detailed look at the revenue contributions from different business segments can provide a clearer picture of where ePlus inc. is seeing the most success and where there might be opportunities for further growth. While specific percentages for each segment may fluctuate, the overall trend indicates a strong demand for integrated technology solutions.

The following table provides a snapshot of the annual revenue trends. Note that while specific segment data may not be available, the overall revenue growth illustrates the company's financial trajectory.

Analysis of significant changes in revenue streams involves understanding market dynamics, technological advancements, and strategic initiatives undertaken by ePlus inc. For instance, increased demand for cloud computing and cybersecurity solutions has likely driven growth in the managed services and security solutions segments. Monitoring these trends is essential for assessing the sustainability of ePlus inc.'s revenue growth.

For more insights into ePlus inc. (PLUS), consider reading: Exploring ePlus inc. (PLUS) Investor Profile: Who’s Buying and Why?

ePlus inc. (PLUS) Profitability Metrics

Understanding ePlus inc.'s profitability involves examining its gross profit, operating profit, and net profit margins. These metrics provide insight into how efficiently ePlus inc. generates profit from its revenue and manages its expenses. By analyzing these key indicators, investors can gain a clearer picture of the company's financial health and operational effectiveness.

Gross profit reveals the direct profit from sales, calculated as revenue less the cost of goods sold (COGS). The trend of gross profit margins indicates the company's efficiency in managing production costs and pricing strategies. For instance, a consistent or increasing gross margin suggests effective cost control or successful pricing adjustments. In fiscal year 2024, ePlus inc. reported gross profit of $243.1 million. The gross profit margin was 24.4% of net sales, compared to 25.4% the prior year.

Operating profit, derived by subtracting operating expenses from gross profit, reflects the profitability of the company's core business operations. Monitoring operating profit margins over time can highlight the impact of administrative and sales expenses on overall profitability. A rising operating margin typically signals improved operational efficiency. ePlus inc. reported operating income of $64.9 million for fiscal year 2024, compared to $74.9 million the prior year.

Net profit, the 'bottom line,' represents the profit remaining after all expenses, including interest and taxes, are deducted from revenue. The net profit margin is a critical indicator of overall financial health. Declining net profit margins may signal issues with cost management, increased competition, or other financial challenges. For fiscal year 2024, ePlus inc. reported net income of $41.4 million, compared to $47.9 million the prior year. As a percentage of net sales, net income was 4.2% for fiscal year 2024, compared to 4.9% the prior year.

Here's a summary of ePlus inc.'s profitability metrics for fiscal year 2024:

• Gross Profit: $243.1 million
• Operating Income: $64.9 million
• Net Income: $41.4 million

Analyzing profitability ratios in comparison to industry averages provides valuable context. If ePlus inc.'s profitability ratios are higher than the industry average, it may indicate a competitive advantage. Conversely, lower ratios may suggest areas needing improvement. Unfortunately, specific industry averages are not available in the provided context.

Operational efficiency is critical for sustaining and improving profitability. Effective cost management and favorable gross margin trends are indicators of strong operational efficiency. ePlus inc.'s gross profit margin decreased to 24.4% in fiscal year 2024 from 25.4% the prior year.

The following table summarizes key financial data for ePlus inc. for the fiscal years 2024 and 2023:

For further insights into ePlus inc.'s financial health, you can read: Breaking Down ePlus inc. (PLUS) Financial Health: Key Insights for Investors

ePlus inc. (PLUS) Debt vs. Equity Structure

Understanding how ePlus inc. (PLUS) finances its operations and growth is crucial for investors. This involves examining the company's debt levels, its debt-to-equity ratio, and how it balances debt and equity funding.

As of March 31, 2024, ePlus inc. (PLUS) reported the following debt situation:

• Total debt: $233.16 million
• Net debt: $168.13 million

ePlus inc. (PLUS) maintains a mix of short-term and long-term debt to fund its operations. As of March 31, 2024:

• Short-term debt: $1.28 million
• Long-term debt: $231.88 million

The debt-to-equity ratio is a significant metric for assessing a company's financial leverage. As of March 31, 2024, ePlus inc. (PLUS) reported a debt-to-equity ratio of 0.57. This ratio indicates the proportion of debt and equity the company uses to finance its assets. A lower ratio generally suggests less financial risk.

Here's a snapshot of ePlus inc.'s (PLUS) capital structure and leverage metrics as of March 31, 2024:

Monitoring these metrics helps investors understand ePlus inc.'s (PLUS) financial strategy and risk profile. For further insights, you can explore Breaking Down ePlus inc. (PLUS) Financial Health: Key Insights for Investors.

ePlus inc. (PLUS) Liquidity and Solvency

Assessing ePlus inc.'s (PLUS) financial health involves a detailed look at its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency concerns its ability to meet long-term obligations.

Assessing ePlus inc.'s Liquidity

Several key metrics are used to evaluate the liquidity of ePlus inc. (PLUS). These include the current and quick ratios, analysis of working capital trends, and an overview of cash flow statements.

• Current and Quick Ratios:
  • The current ratio, which measures a company's ability to pay short-term obligations with its current assets, has been relatively stable, ranging from 1.73 to 1.92.
  • The quick ratio, a more conservative measure that excludes inventory from current assets, has also been stable, ranging from 1.59 to 1.77.
  • Compared to the industry average, ePlus inc.'s (PLUS) current and quick ratios are lower, with industry averages of 2.89 and 2.85, respectively.
  • For fiscal year 2024, the quick ratio was reported as 1.39, increasing to 1.59 in 2023.
• Analysis of Working Capital Trends:
  • Working capital, which is the difference between current assets and current liabilities, has fluctuated.
  • The highest working capital was $575.88 million on June 30, 2024, and the lowest was $490.58 million on September 30, 2024.
  • The most recent working capital as of December 31, 2024, is $511.94 million.
• Cash Flow Statements Overview:
  • Net operating cash flow has been volatile, ranging from -$21.63 million on September 30, 2024, to $104.96 million on March 31, 2024.
  • The most recent net operating cash flow as of December 31, 2024, is $65.70 million.
  • Free cash flow has also been volatile, ranging from -$22.92 million on September 30, 2024, to $104.16 million on March 31, 2024.
  • The most recent free cash flow as of December 31, 2024, is $64.21 million.
  • As of March 31, 2024, cash and cash equivalents were $253.0 million, up from $103.1 million as of March 31, 2023, primarily due to improvements in working capital, offset by acquisitions and stock repurchases.

The following table summarizes key balance sheet data:

These figures indicate significant fluctuations in cash, inventory, and equity throughout the fiscal year.

Potential Liquidity Concerns and Strengths

Despite the stable current and quick ratios, the volatility in net operating cash flow and free cash flow could be a concern. However, the increase in cash and cash equivalents as of March 31, 2024, and December 31, 2024, indicates a strengthening liquidity position. The company's ability to generate free cash flow is crucial for meeting its obligations and investing in future growth. Additionally, a decrease in inventory by 42.6% to $139.7 million as of March 31, 2024, compared to $243.3 million as of March 31, 2023, suggests improved efficiency in inventory management.

For insights into the company's values, see Mission Statement, Vision, & Core Values of ePlus inc. (PLUS).

ePlus inc. (PLUS) Valuation Analysis

Assessing whether ePlus inc. (PLUS) is overvalued or undervalued involves analyzing several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, alongside stock price trends, dividend yield, payout ratios, and analyst consensus.

Currently, up-to-date, specific valuation ratios for ePlus inc. (PLUS) as of April 2025 are not available in the search results. However, we can discuss generally how these metrics are used in valuation analysis:

• Price-to-Earnings (P/E) Ratio: This ratio compares a company's stock price to its earnings per share (EPS). A higher P/E ratio might suggest that a stock is overvalued, or that investors expect high growth in the future. Conversely, a lower P/E ratio could indicate undervaluation or slower growth expectations.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. A lower P/B ratio may suggest undervaluation, as the stock price is low relative to the company's net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares a company's enterprise value (market cap plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It's often used to assess valuation because it accounts for debt and is less affected by accounting practices.

To make an informed decision, it's important to consider these ratios in the context of ePlus inc. (PLUS)'s industry peers and historical performance. Here's a general framework:

Additionally, examining the stock price trends over the last 12 months (or longer) can provide insights into market sentiment and company performance. Analyzing dividend yield and payout ratios, if applicable, is crucial for income-focused investors. Finally, keeping track of analyst consensus (buy, hold, or sell ratings) can offer a summarized view of professional opinions on the stock's valuation and potential.

For further insights into the investors of ePlus inc. (PLUS), explore Exploring ePlus inc. (PLUS) Investor Profile: Who’s Buying and Why?

ePlus inc. (PLUS) Risk Factors

ePlus inc. (PLUS) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges highlighted in their financial reports. Understanding these factors is crucial for investors assessing the company's stability and growth potential. Here’s an overview:

Industry Competition:

The technology industry is intensely competitive, with constant innovation and evolving customer demands. ePlus inc. (PLUS) competes with a wide range of companies, from large multinational corporations to smaller, specialized firms. The inability to effectively compete could result in reduced market share and decreased profitability. Key competitive factors include:

• Pricing pressures due to aggressive competition.
• Rapid technological advancements requiring continuous investment in research and development.
• The need to attract and retain skilled personnel in a tight labor market.

Regulatory Changes:

Changes in regulations, both in the United States and internationally, can pose significant risks. These include:

• Data privacy and security regulations, such as GDPR and CCPA, which require substantial compliance efforts.
• Changes in tax laws that could affect the company's tax liabilities.
• Trade regulations and tariffs that could impact the cost of goods and services.

Market Conditions:

Economic downturns, geopolitical instability, and other market-related factors can significantly affect ePlus inc.'s (PLUS) financial performance. Specific risks include:

• Decreased IT spending by businesses during economic recessions.
• Supply chain disruptions that can impact the availability and cost of products.
• Fluctuations in currency exchange rates, affecting international operations and revenue.

Operational, Financial, and Strategic Risks:

Recent earnings reports and filings may highlight specific operational, financial, or strategic risks. These could include:

• Integration Risks: Challenges associated with integrating acquired businesses, which can impact financial performance and operational efficiency.
• Cybersecurity Threats: Increasing sophistication of cyber threats, which could lead to data breaches, reputational damage, and financial losses.
• Dependence on Key Vendors: Reliance on a limited number of key vendors, which could create supply chain vulnerabilities.

Mitigation Strategies:

ePlus inc. (PLUS) may implement various strategies to mitigate these risks. These could include:

• Diversifying its customer base to reduce reliance on any single client or industry.
• Investing in cybersecurity measures to protect against data breaches and cyberattacks.
• Developing robust business continuity plans to address potential disruptions.
• Implementing hedging strategies to manage currency exchange rate risks.

A comprehensive understanding of these risks and mitigation strategies is essential for investors looking to assess the long-term financial health and stability of ePlus inc. (PLUS).

More information can be found here: Breaking Down ePlus inc. (PLUS) Financial Health: Key Insights for Investors

ePlus inc. (PLUS) Growth Opportunities

ePlus inc. (PLUS) demonstrates several promising avenues for future growth, driven by strategic initiatives and market dynamics. A comprehensive analysis reveals key factors that investors should consider when evaluating the company’s potential.

Key growth drivers for ePlus inc. (PLUS) include:

• Product Innovations: Continuous updates and expansions in their technology solutions offerings.
• Market Expansions: Penetrating new geographic regions and vertical markets.
• Acquisitions: Strategic acquisitions to broaden capabilities and market reach.

Future revenue growth projections and earnings estimates indicate a positive trajectory. While specific figures may vary based on different analysts and models, the consensus points toward steady growth fueled by the increasing demand for IT solutions and services. Keep in mind that these projections are based on available data and market conditions up to April 2025.

Strategic initiatives and partnerships expected to drive future growth include:

• Cloud Services: Expanding cloud-based service offerings to meet the growing demand for cloud solutions.
• Cybersecurity Solutions: Enhancing cybersecurity capabilities to address increasing security threats.
• Strategic Partnerships: Forming alliances with leading technology providers to deliver comprehensive solutions.

ePlus inc. (PLUS) possesses several competitive advantages that position the company for sustained growth:

• Strong Customer Relationships: Maintaining long-term relationships with a diverse customer base.
• Comprehensive Solutions Portfolio: Offering a wide range of IT solutions and services tailored to meet specific customer needs.
• Experienced Management Team: Led by a seasoned team with a proven track record of driving growth and profitability.

To provide a clearer picture, consider the following hypothetical growth scenario based on market trends and current data:

These projections are influenced by factors such as increased IT spending, successful integration of acquired entities, and expansion into high-growth market segments. Investors should also monitor key performance indicators (KPIs) such as recurring revenue, customer retention rates, and gross profit margins to gauge the company’s growth trajectory. For additional insights, check out: Breaking Down ePlus inc. (PLUS) Financial Health: Key Insights for Investors.