E2open Parent Holdings, Inc. (ETWO) DCF Valuation & Fundamental Primer
E2open Parent Holdings, Inc. (ETWO) currently trades at $3.30 with an enterprise value of $1.95B. Our proprietary institutional model rates E2open Parent Holdings, Inc. at 54/100 (Grade: B · Mixed Fundamental Profile). The current market price prices in an implied 5-year revenue CAGR of 18.1% vs. historical growth of 18.8% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of E2open Parent Holdings, Inc. (ETWO) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
E2open Parent Holdings, Inc. (ETWO) 3-Scenario DCF Valuation Range
Stress-test ETWO's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
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: $3.30).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $4.20 +27% | $4.65 +41% | $5.17 +57% | $5.78 +75% | $6.52 +97% |
| 9.3% | $3.48 +5% | $3.83 +16% | $4.23 +28% | $4.70 +42% | $5.25 +59% |
| 10.0% | $2.89 -13% | $3.17 -4% | $3.49 +6% | $3.85 +17% | $4.27 +29% |
| 10.8% | $2.39 -28% | $2.62 -21% | $2.88 -13% | $3.17 -4% | $3.50 +6% |
| 11.5% | $1.97 -40% | $2.16 -35% | $2.37 -28% | $2.61 -21% | $2.88 -13% |
Institutional Software Quality Scorecard (54/100 · Grade B)
Viable recurring software business but carries notable dilution, lower margins, or higher leverage.
Positive FCF but lower conversion efficiency due to capex or timing
Disciplined equity compensation well below software industry average
Sub-par gross margins; higher cost of delivery or hardware/services mix
Moderate leverage or cash burn; monitor liquidity runway
Core Investment Strengths & Moats
Key Operational & Dilution Risks
- Lower software gross margins (49.3%), indicating higher hosting or service delivery drag
Reverse-DCF Solver: What Growth is Priced Into ETWO?
Market implies 18.1% annual revenue growth over next 5 years (28.3% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (7.3% of revenue) and annual share dilution (0.9%/yr). Accounting for both requires 28.3% 5-year revenue CAGR to justify $3.30/sh on a true per-share economic cash flow basis.
E2open Parent Holdings, Inc. (ETWO) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $607.7M | $607.7M | $721.9M | $857.7M | $1.02B | $1.21B | $1.44B |
| Gross Profit | $299.7M | $299.7M | $356.1M | $423.0M | $502.5M | $597.0M | $709.2M |
| Operating Income (EBIT) | $-652.4M | $-486.2M | $-577.5M | $-686.1M | $-815.1M | $-968.4M | $-1.15B |
| Stock-Based Compensation (SBC) | $44.5M | $44.5M | $52.8M | $62.8M | $74.6M | $88.6M | $105.3M |
| Unlevered Free Cash Flow (FCF) | $73.9M | $74.0M | $87.9M | $104.4M | $124.0M | $147.3M | $175.0M |
| SBC-Adjusted True Cash Flow | $29.5M | $29.5M | $35.0M | $41.6M | $49.4M | $58.7M | $69.7M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -17.3 + 0.57 × (Rule of 40) · R² = 76%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 |
|---|---|---|---|---|---|---|---|---|
| E2open Parent Holdings, Inc. | ETWO | $1.03B | $607.7M | 49.3% | 12.2% | 31.0% | 7.3% | 3.1× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 3.1× | $1.90B | $1.03B | $3.30 | 0.0% |
| -20% Multiple Compression | 2.5× | $1.52B | $652.5M | $2.09 | -20.0% |
| -35% Multiple Compression | 2.0× | $1.23B | $367.5M | $1.17 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $3.04B | $2.17B | $6.94 | +59.9% |
Frequently Asked Questions: E2open Parent Holdings, Inc. (ETWO) Valuation
What is E2open Parent Holdings, Inc. (ETWO)'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, E2open Parent Holdings, Inc. (ETWO) has a Base Case implied value of $3.47 per share (with a Bear Case of -$0.01 and a Bull Case of $8.24), compared to its current price of $3.30. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is E2open Parent Holdings, Inc. (ETWO)'s Rule of 40 score and Free Cash Flow margin?
E2open Parent Holdings, Inc. achieves a Rule of 40 score of 31.0%, combining a 18.8% revenue growth run-rate with a 12.2% TTM free cash flow margin on $607.7M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into ETWO stock according to Reverse-DCF analysis?
At $3.30 per share (Enterprise Value of $1.90B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 18.1%, compared to E2open Parent Holdings, Inc.'s historical CAGR of 18.8%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does E2open Parent Holdings, Inc. compare to Software & Cloud Services software peers?
E2open Parent Holdings, Inc. (ETWO) earns an institutional Software Quality Score of 54/100 (Grade B — Mixed Fundamental Profile). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact E2open Parent Holdings, Inc. (ETWO)'s valuation?
E2open Parent Holdings, Inc. recorded $44.5M in TTM stock-based compensation (7.3% of revenue). When treating SBC as a cash-equivalent compensation expense, E2open Parent Holdings, Inc.'s SBC-adjusted free cash flow yield is 2.9%, scoring 21/25 on our Shareholder Dilution Friction pillar.