Analyst Meta Marshall of Morgan Stanley maintained a Sell rating on 8X8 (EGHT – Research Report), retaining the price target of $2.60.
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Meta Marshall’s rating is based on a combination of factors that influence 8X8’s financial performance and growth prospects. Despite some positive developments, such as the growth in multi-product sales and AI-based solutions, these advancements are not substantial enough to counterbalance the ongoing challenges faced by the company. The transition from Fuze and a challenging UCaaS market environment pose significant hurdles.
The decision to continue investing in growth is seen as a necessary step, but it results in declining margins for the second consecutive year. The company’s strong reliance on the UCaaS market, which it does not anticipate becoming more attractive in the near term, adds to the concerns. While there are some favorable free cash flow dynamics, the transition challenges and uncertain growth outlook led to the decision to maintain a cautious stance with a Sell rating until more evidence of successful growth appears.
According to TipRanks, Marshall is a 4-star analyst with an average return of 6.5% and a 55.70% success rate. Marshall covers the Technology sector, focusing on stocks such as Arista Networks, Lumentum Holdings, and Cisco Systems.
In another report released yesterday, Wells Fargo also maintained a Sell rating on the stock with a $2.00 price target.