EPlus (PLUS) Earnings Quality Concerns Challenge Bullish Narrative After 53.7% Profit Surge

ePlus (PLUS) has just reported Q3 2026 results with revenue of US$614.8 million and basic EPS of US$1.28, set against trailing twelve month revenue of about US$2.4 billion and EPS of US$5.27 that came alongside a 53.7% rise in earnings over the past year. The company has seen revenue move from US$498.1 million and EPS of US$0.96 in Q4 2025 to between roughly US$608.8 million and US$637.3 million, with EPS ranging from US$1.03 to US$1.45 across the first three quarters of 2026. With net margin at 5.8%, investors are likely to focus on how much of that profitability is underpinned by core cash earnings versus non cash items.

See our full analysis for ePlus.

With the latest numbers on the table, the next step is to see how they line up with the most common stories around ePlus, highlighting where the data backs those narratives and where it puts them under pressure.

Curious how numbers become stories that shape markets? Explore Community Narratives

53.7% earnings lift versus 7.3% trend

• Over the last 12 months, net income excluding extra items is US$138.5 million with EPS of US$5.27, compared with a 53.7% earnings increase against a five year average growth rate of 7.3% per year.
• Bulls often point to the strong trailing growth as evidence of earnings momentum. Yet the figures show a contrast between the recent 53.7% jump and the 7.3% five year pace, which raises fair questions about how repeatable this step up is when Q3 2026 net income of US$33.4 million sits not far from Q4 2025 at US$25.2 million.
  • Supporters can highlight that trailing twelve month revenue of about US$2.4b and net income of US$138.5 million now sit well above the single quarter levels seen through 2025. This aligns with a stronger recent profit picture.
  • On the other hand, the move from EPS of US$0.91 in Q3 2025 to US$1.28 in Q3 2026, while solid, is less dramatic than the 53.7% one year growth statistic. This means the bullish story rests on a relatively concentrated period of improvement rather than a long series of step changes.

Strong recent growth numbers can be exciting, but if you want to see how different investors stitch these figures into a longer term story, it is worth reading the full blended take on the company: 📊 Read the full ePlus Consensus Narrative.

Net margin at 5.8% with non cash earnings risk

• The company reports a 5.8% net profit margin over the last year, up from 4.3% previously, while risk analysis highlights that a high level of non cash earnings is a major concern for the quality of those profits.
• Critics focus on this bearish angle that earnings quality matters as much as size. The data offers support for that view because the step up in profitability is paired with material non cash contributions, so investors looking at figures like Q3 2026 net income of US$33.4 million and trailing EPS of US$5.27 are reminded that not all of that flows through as cash that can be reinvested or returned.
  • The flagged high level of non cash earnings means that even with a margin moving from 4.3% to 5.8%, some portion of the improvement may relate to accounting items rather than underlying cash generation. This lines up with the bearish focus on earnings quality.
  • At the same time, the presence of discontinued operations in several quarters, such as US$10.6 million in Q1 2026 and US$11.5 million in Q2 2025, shows there are moving parts in the income statement that bears can legitimately point to when questioning how clean the profit trend is.

Valuation: 16x P/E and DCF gap

• The shares trade at US$84.66, which is associated with a P/E of 16x compared with peer multiples around 20x and an industry figure of 27.1x, while the stock price also sits below a DCF fair value of about US$124.86 and an analyst price target of US$126.00.
• Supporters argue this combination heavily supports a bullish value angle because the current P/E is lower than peers and the electronic industry. Yet the same data set highlights that forecasts call for earnings growth of about 8.0% per year and revenue growth of about 6.9% per year, which are both below the cited US market growth rates, so the discount could also reflect more moderate growth expectations rather than a simple mispricing.
  • On the supportive side, a share price about 32.2% below the DCF fair value and below sector P/E levels is the kind of setup value focused investors often look for when trailing earnings have grown 53.7% over the past year.
  • On the cautious side, the same risk summary pointing to a high proportion of non cash earnings offers a clear reason why some investors might want that discount relative to the DCF fair value of US$124.86 and the US$

  Next Steps

  Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on ePlus's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

  See What Else Is Out There

  ePlus shows a wide gap between earnings and cash quality, with a high level of non cash items raising questions about how resilient its profits really are.

  If you are concerned about profit quality and would rather focus on companies where balance sheets back up the earnings story, check out our solid balance sheet and fundamentals stocks screener (46 results) right now to focus on businesses built on sturdier financial footing.

  This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com