Analysts Have Made A Financial Statement On 8x8, Inc.'s (NASDAQ:EGHT) Second-Quarter Report

The investors in 8x8, Inc.'s (NASDAQ:EGHT) will be rubbing their hands together with glee today, after the share price leapt 32% to US$2.86 in the week following its second-quarter results. It was a pretty bad result overall; while revenues were in line with expectations at US$181m, statutory losses exploded to US$0.11 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for 8x8

Taking into account the latest results, 8x8's ten analysts currently expect revenues in 2025 to be US$720.0m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 44% to US$0.30. Before this latest report, the consensus had been expecting revenues of US$720.4m and US$0.29 per share in losses. So it's pretty clear consensus is mixed on 8x8 after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a pronounced increase to per-share loss expectations.

As a result, there was no major change to the consensus price target of US$3.09, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on 8x8, with the most bullish analyst valuing it at US$4.25 and the most bearish at US$2.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that 8x8's revenue growth is expected to slow, with the forecast 0.1% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it seems obvious that 8x8 is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that 8x8's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$3.09, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for 8x8 going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 4 warning signs for 8x8 you should know about.

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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.