eGain Corporation (EGAN) DCF Valuation & Fundamental Primer
eGain Corporation (EGAN) trades at $11.90 with a market enterprise value of $254.9M and generated $91.1M in TTM revenue and $20.5M in free cash flow (filed 2026-10-13 (period ended 2026-06-30)). Our 5-year DCF model estimates an implied intrinsic value of $11.71 per diluted share ($249.7M DCF enterprise value, Grade: A · 87/100 · High-Quality Compounder).
SEC 10-K/10-Q DCF teardown of eGain Corporation (EGAN): $91.1M TTM revenue (-0.2% growth), 73.4% GAAP gross margin, 22.5% FCF margin, 3.1% SBC/revenue, and R&D Return Grade C (Burners, $0.16 new gross profit per $1 prior R&D).
eGain Corporation (EGAN) earns a "Watch" rating and an institutional Quality Score of 87/100 (Grade A). On $91.1M in baseline revenue (-0.2% growth, 73.4% gross margin, 22.5% FCF margin), our 5-year DCF yields an Enterprise Value of $249.7M ($11.71/share vs. $11.90 market price). On the R&D Return Benchmark, EGAN ranks #145 of 174 (Burners · Grade C, 0.16× return).
Gross Margin & Unit Economics: eGain Corporation operates at a 73.4% gross margin on $91.1M revenue (+0.6 pts above the Software - Application median of 72.7%).
R&D Productivity (Burners · Grade C): Investing 32.3% of revenue in R&D ($29.4M) generates $0.16 of incremental gross profit per R&D dollar (Rank #145 of 174).
Rule of 40 & Cash Conversion: Combining -0.2% top-line growth with 22.5% FCF margin yields a 22.3% Rule of 40 score (vs. 47.2% cohort median) and $249.7M DCF Enterprise Value.
3-Statement Financial Schedule & 5-Year Horizon
Synchronized directly with the 3-Year Operating Statement (73.3% Gross Margin · -0.2% Growth)
| Income Statement Line | Year 1 (2026) | Year 2 (2027) | Year 3 (2028) |
|---|---|---|---|
| Revenue | $91.1M | $90.9M | $90.7M |
| Cost of Revenue (COGS) | ($24.3M) | ($23.8M) | ($23.3M) |
| Gross Profit & Margin | $66.8M (73.3%) | $67.2M (73.8%) | $67.5M (74.3%) |
| Research & Development (R&D) | $29.4M | $28.2M | $27.0M |
| Sales & Marketing (S&M) | $21.2M | $20.3M | $19.4M |
| General & Administrative (G&A) | $8.2M | $7.9M | $7.5M |
| Operating EBIT | $8.0M (8.7%) | $10.8M (11.8%) | $13.5M (14.9%) |
| Adjusted EBITDA | $10.2M (11.2%) | $13.0M (14.3%) | $15.8M (17.4%) |
3 Key Underwriting Risks
Structural sensitivities monitored in the 3-Statement Financial Engine
Value-Creation Levers · Quantified Statement Impact
Apply any lever below to write its operating assumptions directly into the 3-Statement Model
Automate cloud hosting & support workflows to lift gross margin from 73.4% to 78.3%.
Align R&D intensity and ASC 350-40 capitalization to the R&D Compounders cohort median, recapturing $8.5M in annual EBITDA.
Lift net dollar retention and expansion velocity by +300 bps, compounding Year 3 revenue to $96.3M.
eGain Corporation (EGAN) 3-Scenario DCF Valuation Range
Stress-test EGAN's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Simulate how deploying Gemini workflow automation and autonomous engineering expands EGAN's Gross Margin, FCF Margin, DCF share price, and 2x2 R&D Return Quadrant.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $11.90).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $12.67 +6% | $13.25 +11% | $13.94 +17% | $14.74 +24% | $15.71 +32% |
| 9.3% | $11.71 -2% | $12.17 +2% | $12.70 +7% | $13.31 +12% | $14.03 +18% |
| 10.0% | $10.92 -8% | $11.29 -5% | $11.71 -2% | $12.19 +2% | $12.74 +7% |
| 10.8% | $10.26 -14% | $10.56 -11% | $10.90 -8% | $11.28 -5% | $11.72 -2% |
| 11.5% | $9.69 -19% | $9.94 -16% | $10.22 -14% | $10.53 -11% | $10.88 -9% |
Institutional Software Quality Scorecard (87/100 · Grade A)
Strong fundamentals, above-average cash generation, and robust competitive positioning.
Elite deferred revenue float; FCF exceeds operating income by >20%
Minimal dilution friction; management compensation aligned with shareholders
Solid gross margins with potential for operating leverage at scale
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 258% of EBIT driven by upfront annual collections
- Low dilution friction: SBC is only 3.1% of revenue
- Net cash positive: $73.3M balance sheet buffer
Key Operational & Dilution Risks
Audited R&D Intensity is 32.3% of revenue with a 0.16× incremental gross profit return per R&D dollar. Under your current Stage 1 (-0.2% CAGR / 73.4% GM) assumptions, EGAN projects to -0.00× R&D Return (Grade C · Burners).
Reverse-DCF Solver: What Growth is Priced Into EGAN?
Market implies 0.3% annual revenue growth over next 5 years (1.9% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (3.1% of revenue) and annual share dilution (0.0%/yr). Accounting for both requires 1.9% 5-year revenue CAGR to justify $11.90/sh on a true per-share economic cash flow basis.
eGain Corporation (EGAN) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $91.1M | $91.1M | $90.9M | $90.7M | $90.5M | $90.3M | $90.1M |
| Gross Profit | $66.9M | $66.8M | $66.7M | $66.6M | $66.4M | $66.3M | $66.1M |
| Operating Income (EBIT) | $8.0M | $8.0M | $7.9M | $7.9M | $7.9M | $7.9M | $7.9M |
| Stock-Based Compensation (SBC) | $2.8M | $2.8M | $2.8M | $2.8M | $2.8M | $2.8M | $2.8M |
| Unlevered Free Cash Flow (FCF) | $20.5M | $20.5M | $20.5M | $20.4M | $20.4M | $20.4M | $20.3M |
| SBC-Adjusted True Cash Flow | $17.7M | $17.7M | $17.7M | $17.7M | $17.6M | $17.6M | $17.5M |
Software - Application Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = 6.7 + 0.05 × (Rule of 40) · R² = 12%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| eGain Corporation | EGAN | $328.2M | $91.1M | 73.3% | 22.5% | 22.3% | 3.1% | 2.8× |
| Grab Holdings Limited | GRAB | $20.18B | $2.80B | 42.0% | 27.7% | 84.0% | 10.0% | 6.3× |
| Figma, Inc. | FIG | $18.07B | $749.0M | 88.3% | -9.2% | 39.1% | 126.5% | 23.5× |
| Full Truck Alliance Co. Ltd. | YMM | $71.73B | $11.24B | 86.6% | 25.8% | 70.2% | 4.4% | 5.9× |
| ServiceTitan, Inc. | TTAN | $9.97B | $771.9M | 64.9% | 2.0% | 30.5% | 21.2% | 12.5× |
| InterDigital, Inc. | IDCC | $8.65B | $868.5M | 80.5% | 30.6% | 55.3% | 5.3% | 9.9× |
| OPEN TEXT CORP | OTEX | $8.11B | $5.30B | 63.5% | 13.0% | 23.8% | 2.0% | 2.6× |
| Peer Cohort Median Benchmark (N=6) | 72.7% | 19.4% | 47.2% | 7.6% | 8.1× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 2.8× | $254.9M | $328.2M | $11.90 | 0.0% |
| -20% Multiple Compression | 2.2× | $203.9M | $277.2M | $10.05 | -20.0% |
| -35% Multiple Compression | 1.8× | $165.7M | $239.0M | $8.67 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $455.7M | $529.0M | $19.18 | +78.8% |
Frequently Asked Questions: eGain Corporation (EGAN) Valuation
What is eGain Corporation (EGAN)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, eGain Corporation (EGAN) has a Base Case implied value of $11.71 per share (with a Bear Case of $8.58 and a Bull Case of $14.82), compared to its current price of $11.90. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is eGain Corporation (EGAN)'s Rule of 40 score and Free Cash Flow margin?
eGain Corporation achieves a Rule of 40 score of 22.3%, combining a -0.2% revenue growth run-rate with a 22.5% TTM free cash flow margin on $91.1M in trailing twelve-month revenue. In the Software - Application peer cohort, the median Rule of 40 benchmark is 47.2%.
What revenue growth rate is priced into EGAN stock according to Reverse-DCF analysis?
At $11.90 per share (Enterprise Value of $254.9M), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 0.3%, compared to eGain Corporation's historical CAGR of -0.2%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
What is eGain Corporation (EGAN)'s R&D Return Score and innovation productivity?
On the Golden Door Software R&D Return Benchmark, eGain Corporation (EGAN) is ranked #145 out of 174 scored software peers, earning a Grade C in the "Burners" quadrant. eGain Corporation invests 32.3% of FY revenue into R&D ($29.4M) and generated $0.16 of incremental gross profit per prior-year R&D dollar.
How does eGain Corporation compare to Software - Application peers?
eGain Corporation (EGAN) earns an institutional Software Quality Score of 87/100 (Grade A — High-Quality Compounder). Across its Software - Application peer group (GRAB, FIG, YMM, TTAN, IDCC), the cohort trades at a median EV/TTM Revenue multiple of 8.1× and a median gross margin of 72.7%.
How does Stock-Based Compensation (SBC) impact eGain Corporation (EGAN)'s valuation?
eGain Corporation recorded $2.8M in TTM stock-based compensation (3.1% of revenue). When treating SBC as a cash-equivalent compensation expense, eGain Corporation's SBC-adjusted free cash flow yield is 5.4%, scoring 25/25 on our Shareholder Dilution Friction pillar.