8X8 (EGHT) AI Stock Analysis

• Market Cap: $243.17M
• Dividend Yield: N/A
• Average Volume (3M): 1.56M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.99
• Revenue Growth: -2.23%
• EPS Growth: 19.48%
• Country: US
• Employees: 1,948
• Sector: Technology
• Sector Strength: 89
• Industry: Software - Application
• EPS (TTM): 0.08
• Shares Outstanding: 135,092,910
• 10 Day Avg. Volume: 1,518,697
• 30 Day Avg. Volume: 1,563,554
• PEG Ratio: -0.15
• Price to Book (P/B): 2.03
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.66
• Enterprise Value/Market Cap: 2.29
• Enterprise Value/Revenue: 0.19
• Enterprise Value/Gross Profit: 1.14
• Enterprise Value/Ebitda: 5.61
• 1Y Price Target: $2.30
• Price Target Upside: 27.78% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 51 Neutral
• 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

Financial Performance

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.

Negative Factors

Competitive Challenges

UCaaS competition in the U.S. remains intense, presenting ongoing challenges for the company.

Operational Challenges

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

8X8 Business Overview & Revenue Model

Company Description

8x8, 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 Money

8x8, 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 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

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

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

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.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
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
EBITDA	34.93M	23.06M	14.82M	-102.68M	-100.91M	-118.69M
Net Income	-45.40M	-67.59M	-73.14M	-175.38M	-165.59M	-172.37M
Balance Sheet
Total Assets	698.21M	755.98M	840.88M	910.27M	678.41M	700.64M
Cash, Cash Equivalents and Short-Term Investments	104.17M	117.31M	137.63M	136.05M	152.87M	170.85M
Total Debt	425.76M	477.63M	568.87M	537.46M	403.83M	389.86M
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: Positive
• Last Price: 1.80
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGHT, the sentiment is Positive. The current price of 1.8 is above the 20-day moving average (MA) of 1.76, above the 50-day MA of 1.75, and below the 200-day MA of 2.27, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 51.69 is Neutral, neither overbought nor oversold. The STOCH value of 44.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EGHT.

8X8 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BAND	65 Neutral	$418.47M	―	-0.32%	―	18.51%	97.57%
Sector *	63 Neutral	$32.92B	6.79	-11.98%	1.89%	5.66%	-22.06%
AUDC	62 Neutral	$284.33M	17.19	9.33%	3.72%	-1.13%	61.49%
NVTS	58 Neutral	$1.41B	―	-26.43%	―	-16.95%	-2.47%
SMRT	58 Neutral	$173.27M	―	-22.66%	―	-25.43%	-135.09%
ONTF	58 Neutral	$230.22M	―	-24.47%	―	-8.39%	7.79%
EGHT	51 Neutral	$243.17M	―	-24.28%	―	-2.23%	19.48%

8X8 Corporate Events

8×8 Strengthens Board with New Director Appointment

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.