Not every high-conviction technology name has to have a trillion-dollar market capitalization or a high price-to-earnings ratio. Indeed, ePlus (NASDAQ:PLUS) stock doesn’t fit the typical mold, but that’s not a problem at all.
The software-as-a-service solution provider has achieved recognition as a leader in this niche industry this year. More important than accolades, however, is ePlus’s ability to monetize its service offerings. As we’ll discover, ePlus isn’t the most famous publicly listed tech company, but ePlus’s sales and profit growth are truly remarkable.
PLUS Stock Has Momentum but Isn’t Overvalued
In terms of size and name recognition, ePlus isn’t even close to the FAANG or Magnificent Seven technology titans.
Having surged from $42 in May to $63 recently, PLUS stock has fully participated in 2023’s tech-stock rally.
Does this mean ePlus is overvalued on Wall Street? Not at all. As it turns out, ePlus’s trailing 12-month GAAP-measured P/E ratio of around 13x is much lower than the sector median P/E ratio of approximately 25x.
Furthermore, ePlus’s trailing price-to-sales ratio of 0.77x should be attractive to value-focused investors, especially when it’s compared to the sector median P/S ratio of 2.64x.
Thus, ePlus offers excellent shareholder value in 2023 compared to some other tech-sector names.
The company also provides investors with exposure to high-confidence technology subsectors, including cloud computing, cybersecurity/threat detection, artificial intelligence, data center management, networking and more.
ePlus Is a Consistent Earnings Winner
In addition, ePlus has an excellent track record of quarterly EPS beats. As we learn more about ePlus’s financial performance, it will become evident that PLUS stock probably isn’t finished rallying in 2023.
Starting with the top line, ePlus generated net sales of $574.2 million in the first quarter of fiscal 2024 (which ended June 30), up 25.3% year over year. CEO Mark Marron cited ePlus’s “gains in cloud and networking, as well as contributions from recent acquisitions.”
Concerning the company’s bottom-line results, ePlus reported quarterly non-GAAP diluted earnings of $1.41 per share.
This represents a 42.4% year-over-year increase, and it’s substantially above Wall Street’s call for $0.99 per share. Marron attributed ePlus’s EPS growth, in part, to improvement in the company’s sales revenue.
Along with that, the CEO cited “continued operational discipline and effective cost management.”
PLUS Stock Could Be Your Portfolio’s Hidden Gem
ePlus is a technology firm that few stock traders are talking about today. Yet, it has the potential to be a highly buzzworthy business in the coming quarters and years.
Also, ePlus is reasonably valued and possibly even undervalued among stock traders. It’s not a Magnificent Seven company, but ePlus’s sales and income growth are certainly magnificent.
If you’re feeling enthused about ePlus, we encourage you to conduct your due diligence on this company. At the end of the day, PLUS stock gets an “A” grade and is a hidden treasure for technology-sector investors.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
