8X8 (EGHT) AI Stock Analysis

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8X8

(NASDAQ:EGHT)

Rating:51Neutral

Price Target:―

8X8's stock score reflects its strong financial discipline with improving cash flows and debt reduction efforts. However, persistent profitability challenges, high leverage, and bearish technical indicators weigh heavily. The negative P/E ratio further highlights the financial hurdles. Despite these challenges, strategic focus on innovation and customer satisfaction provide potential upside.

Positive Factors

Capital Structure

There are encouraging signs of underlying stabilization at EGHT, from accelerating ex-Fuze growth and improved capital structure.

Product Growth

EGHT is experiencing some success with new products, evidenced by 60% growth in new products and 84% growth in AI-based solutions.

Revenue Growth

Customer experience (CX) vendor EGHT service revenue ex. Fuze grew 2.8%, indicating line of sight to positive revenue growth.

Negative Factors

Competitive Environment

Operating challenges remain, including finalizing go to market updates, near term margin pressure and a competitive environment.

Financial Guidance

Following a quarter of mostly in line results but softer guidance, revenue estimates for FY26/FY27 are being decreased by 1.3%/2.3% respectively.

Fuze Transition

The transition of Fuze continues to be a significant obstacle, with challenges in returning to growth.

8X8 (EGHT) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$235.34M

Dividend YieldN/A

Average Volume (3M)1.39M

Price to Earnings (P/E)―

Beta (1Y)1.95

Revenue Growth-2.23%

EPS Growth19.48%

CountryUS

Employees1,948

SectorTechnology

Sector Strength83

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.08

Shares Outstanding134,479,300

10 Day Avg. Volume1,016,635

30 Day Avg. Volume1,393,318

Financial Highlights & Ratios

PEG Ratio-0.15

Price to Book (P/B)2.14

Price to Sales (P/S)0.00

P/FCF Ratio3.77

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$2.30

Price Target Upside29.94% Upside

Rating ConsensusHold

Number of Analyst Covering7

8X8 Business Overview & Revenue Model

Company Description8x8, Inc. provides voice, video, chat, contact center, and enterprise-class application programmable interface (API) Software-as-a-Service solutions for small and mid-size businesses, mid-market and larger enterprises, government agencies, and other organizations worldwide. The company offers unified communications, team collaboration, video conferencing, contact center, data and analytics, communication APIs, and other services. It provides 8x8 Work, a self-contained end-to-end united communications solution that delivers enterprise voice with public switched telephone network connectivity, video meetings, and unified messaging, as well as direct messages, public and private team messaging rooms, and short and multimedia services; 8x8 Contact Center, a multi-channel cloud-based contact center solution; and 8x8 CPaaS, a set of global communications Platform-as-a-Service. The company also offers and X1 through X4 and X5 through X8, which provide enterprise-grade voice, unified communications, and video meetings and team collaboration, and contact center solutions. It markets its services to end users through search engine marketing and optimization, third-party lead generation sources, industry conferences, trade shows, Webinars, and digital advertising channels, as well as direct sales organization. The company was incorporated in 1987 and is headquartered in Campbell, California.

How the Company Makes Money8x8, Inc. generates revenue primarily through its subscription-based model. Customers pay recurring fees for access to its cloud communication services, which include voice, video, messaging, and contact center solutions. The company offers tiered pricing plans, which vary based on the size of the business and the specific features they require. Additional revenue streams include professional services, such as implementation and training, as well as hardware sales like phones and other communication devices. Strategic partnerships with telecom providers and technology companies further enhance 8x8's market reach and revenue potential, while continuous investment in R&D ensures the company remains competitive in the evolving cloud communications market.

8X8 Earnings Call Summary

Earnings Call Date:May 19, 2025

(Q4-2025)

% Change Since: -1.67%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant progress in core revenue growth, cash flow, and product adoption, particularly in the CPaaS and Microsoft Teams integrations. However, these positive developments were somewhat offset by the ongoing impact of the Fuze transition and macroeconomic challenges affecting sales cycles and product growth.

Q4-2025 Updates

Positive Updates

Strong Growth in Core 8x8 Revenue

Year-over-year growth in 8x8, excluding revenue from all Fuze customers, accelerated to 4.6% from 2.7% in Q3, marking the highest growth rate in 8x8 standalone service revenue in 10 quarters.

Record Cash Flow from Operations

The combined cash flow from operations for fiscal 2024 and 2025 was the highest two years ever at 8x8, accounting for over half the market capitalization.

Rapid Adoption of Communications APIs

Continued rapid adoption of communications APIs (CPaaS) with a surge in interactions driving solid growth.

Growth in Multi-Product Customers

The number of customers with three or more products increased by 13% year-over-year to more than 700 customers.

Strong Sales of Microsoft Teams Integrations

Sales of Microsoft Teams integrations saw new license sales up 72% in the fourth quarter of 2024, with a cumulative number of licenses sold growing 30% year-over-year.

Negative Updates

Impact of Fuze Transition

The anticipated decline in revenue from legacy Fuze customers continued to impact overall revenue growth, with Fuze-related revenue reduced to under 5% of service revenue.

Macroeconomic and Market Challenges

Economic shifts, tariff actions, and global uncertainty added complexity to the business environment, affecting deal sizes and sales cycles.

Slight Slowdown in New Product Growth

There was a slight slowdown in the growth rate of new products compared to previous quarters due to macroeconomic factors.

Company Guidance

During 8x8's fiscal year 2025 earnings call, significant guidance metrics were provided highlighting the company's progress and future outlook. The fourth quarter saw a year-over-year growth in 8x8's standalone service revenue to 4.6%, up from 2.7% in Q3, marking the highest growth rate in 10 quarters. For fiscal 2025, excluding revenue from Fuze customers, service revenue grew by 2.8%, compared to 1.8% in fiscal 2024. The company also reported its highest combined cash flow from operations for fiscal years 2024 and 2025, surpassing half of its market capitalization. Looking ahead, 8x8 anticipates high single-digit revenue growth and double-digit operating margins by fiscal 2028, despite transitioning away from legacy Fuze platforms by the end of calendar year 2025. The company expects fiscal 2026 service revenue to be between $682 million and $702 million, with a total revenue forecast of $702 million to $724 million. Operating margin is projected between 9% and 10%, and cash flow from operations is expected to range from $40 million to $50 million for the full year. These projections reflect ongoing investments in platform innovation, AI capabilities, and a strategic focus on mid-market and enterprise customers.

8X8 Financial Statement Overview

Summary

8X8 demonstrates strong gross profitability and improving cash flows, but struggles with profitability and high leverage pose risks. While some financial metrics are trending positively, consistent revenue growth and debt management are critical for future stability.

Income Statement

Neutral

8X8 shows modest improvement in revenue growth but still struggles with profitability. The TTM gross profit margin is strong at 68%, indicating effective cost management. However, negative net profit margins due to ongoing losses point to challenges in achieving profitability. Revenue growth is inconsistent, with a decline in the latest annual period.

Balance Sheet

Neutral

The company has significant debt, with a high debt-to-equity ratio of 2.44 in the latest TTM period, indicating high leverage. Stockholders' equity has decreased over time, reducing the equity ratio to 16.2%. The return on equity remains negative due to continued net losses, posing a risk to financial stability.

Cash Flow

Neutral

Cash flows are improving, with positive operating cash flow and free cash flow in the TTM period. The operating cash flow to net income ratio is strong at -1.55, reflecting better cash generation despite net losses. Free cash flow growth is positive, but high financing outflows show reliance on external funding.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
717.44M	728.71M	743.94M	638.13M	532.34M	446.24M
	Gross Profit
487.66M	503.80M	502.46M	390.57M	302.19M	245.01M
	EBIT
555.00K	-27.60M	-66.29M	-154.14M	-146.15M	-159.82M
	EBITDA
34.93M	23.06M	14.82M	-102.68M	-100.91M	-118.69M
	Net Income Common Stockholders
-45.40M	-67.59M	-73.14M	-175.38M	-165.59M	-172.37M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
104.17M	117.31M	137.63M	136.05M	152.87M	170.85M
	Total Assets
698.21M	755.98M	840.88M	910.27M	678.41M	700.64M
	Total Debt
425.76M	477.63M	568.87M	537.46M	403.83M	389.86M
	Net Debt
321.59M	361.37M	457.47M	446.25M	291.30M	252.47M
	Total Liabilities
585.20M	654.02M	740.98M	727.90M	517.90M	509.91M
	Stockholders Equity
113.01M	101.96M	99.91M	182.37M	160.50M	190.73M
Cash Flow		Free Cash Flow
64.60M	62.05M	33.90M	10.17M	-49.31M	-161.31M
	Operating Cash Flow
70.33M	78.98M	48.79M	34.68M	-14.07M	-93.91M
	Investing Cash Flow
-13.91M	8.55M	6.05M	-159.98M	-36.32M	-106.29M
	Financing Cash Flow
-119.87M	-83.41M	-37.78M	105.42M	13.19M	72.09M

8X8 Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price1.77

Price Trends

50DMA

1.77

Negative

100DMA

2.19

Negative

200DMA

2.28

Negative

Market Momentum

MACD

-0.04

Negative

RSI

52.17

Neutral

STOCH

77.75

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGHT, the sentiment is Neutral. The current price of 1.77 is above the 20-day moving average (MA) of 1.74, below the 50-day MA of 1.77, and below the 200-day MA of 2.28, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 52.17 is Neutral, neither overbought nor oversold. The STOCH value of 77.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EGHT.

8X8 Risk Analysis

8X8 disclosed 40 risk factors in its most recent earnings report. 8X8 reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

8X8 Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$11.75B	10.58	-7.10%	2.91%	7.47%	-7.95%
AUDC	61 Neutral	$281.36M	16.82	9.33%	3.80%	-1.13%	61.49%
BAND	60 Neutral	$429.18M	―	-0.32%	―	18.51%	97.57%
NVTS	60 Neutral	$1.30B	―	-26.43%	―	-16.95%	-2.47%
ONTF	56 Neutral	$233.19M	―	-24.47%	―	-8.39%	7.79%
EGHT	51 Neutral	$235.34M	―	-24.28%	―	-2.23%	19.48%
SMRT	51 Neutral	$171.02M	―	-22.66%	―	-25.43%	-135.09%

* Technology Sector Average

Performance Comparison

EGHT

8X8

1.77

-0.83

-31.92%

AUDC

Audiocodes

9.48

-0.18

-1.86%

BAND

Bandwidth

14.23

-5.35

-27.32%

NVTS

Navitas Semiconductor

6.05

1.60

35.96%

ONTF

ON24

5.53

-0.16

-2.81%

SMRT

SmartRent

0.93

-1.42

-60.43%

8X8 Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

8×8 Strengthens Board with New Director Appointment

Positive

Nov 18, 2024

8×8, Inc. has appointed John Pagliuca, CEO of N-able, to its Board of Directors, bringing extensive leadership experience in the SaaS industry. Pagliuca’s expertise in driving revenue and business growth is expected to be a valuable asset to 8×8, which focuses on enhancing customer experience through integrated communication solutions. With this appointment, 8×8 aims to strengthen its board as it continues to innovate and expand in the business communications market.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.