8x8 (NYSE:EGHT) - Share price, News & Analysis

Q: What is the Fair Price of EGHT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

EGHT ($5.21) is trading below our estimate of [[fair value]] ($15.23)

EGHT fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	0/6
Financial Health	3/6
Dividends	0/6

EGHT Stock Overview

Rewards

Trading at 65.8% below our estimate of its fair value

Revenue is forecast to grow 13.12% per year

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year

8x8 Competitors

Yext

NYSE:YEXT

US$593.2m

Karooooo

NasdaqCM:KARO

US$667.0m

Magic Software Enterprises

NasdaqGS:MGIC

US$872.4m

Intapp

NasdaqGS:INTA

US$912.8m

Price History & Performance

Summary of all time highs, changes and price drops for 8x8
Historical stock prices
Current Share Price	US$5.21
52 Week High	US$28.20
52 Week Low	US$4.99
Beta	1.23
1 Month Change	-27.94%
3 Month Change	-60.08%
1 Year Change	-81.27%
3 Year Change	-78.91%
5 Year Change	-64.07%
Change since IPO	-26.88%

Recent News & Updates

May 26

8x8, Inc. Calls Win Again

The shares have collapsed in price, so I thought I'd review it again because a $6.90 stock is far less risky than a $14 stock. Still not worth it. The problem is that the disconnect between sales and net income persists. Sales are great, but they're meaningless if they don't lead to profits. For those who insist on staying long here, I think call options are the safest alternative. The calls I recommended previously did far less badly than the stock.

Shareholder Returns

	EGHT	US Software	US Market
7D	-10.3%	-4.7%	-2.5%
1Y	-81.3%	-23.7%	-21.2%

Return vs Industry: EGHT underperformed the US Software industry which returned -23.6% over the past year.

Return vs Market: EGHT underperformed the US Market which returned -21.7% over the past year.

Price Volatility

Is EGHT's price volatile compared to industry and market?
EGHT volatility
EGHT Average Weekly Movement	9.3%
Software Industry Average Movement	11.0%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: EGHT is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: EGHT's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1987	2,216	Dave Sipes	https://www.8x8.com

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.

8x8 Fundamentals Summary

How do 8x8's earnings and revenue compare to its market cap?
EGHT fundamental statistics
Market Cap	US$618.14m
Earnings (TTM)	-US$175.38m
Revenue (TTM)	US$638.13m

1.0x

P/S Ratio

-3.5x

P/E Ratio

Is EGHT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
EGHT income statement (TTM)
Revenue	US$638.13m
Cost of Revenue	US$247.56m
Gross Profit	US$390.57m
Other Expenses	US$565.96m
Earnings	-US$175.38m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-1.48
Gross Margin	61.21%
Net Profit Margin	-27.48%
Debt/Equity Ratio	245.4%

How did EGHT perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is EGHT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for EGHT?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for EGHT. This is calculated by dividing EGHT's market cap by their current preferred multiple.
What is EGHT's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$618.14m

EGHT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.6x
Enterprise Value/EBITDA	-8.2x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does EGHT's PS Ratio compare to its peers?

EGHT PS Ratio vs Peers

The above table shows the PS ratio for EGHT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	2.7x
YEXT Yext	1.5x	5.8%	US$593.2m
KARO Karooooo	4x	15.8%	US$667.0m
MGIC Magic Software Enterprises	1.7x	9.0%	US$872.4m
INTA Intapp	3.5x	17.1%	US$912.8m
EGHT 8x8	1x	13.1%	US$618.1m

Forward PS

Price-To-Sales vs Peers: EGHT is good value based on its Price-To-Sales Ratio (1x) compared to the peer average (2.7x).

Price to Earnings Ratio vs Industry

How does EGHT's PE Ratio compare vs other companies in the US Software Industry?

Price-To-Sales vs Industry: EGHT is good value based on its Price-To-Sales Ratio (1x) compared to the US Software industry average (4.4x)

Price to Sales Ratio vs Fair Ratio

What is EGHT's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

EGHT PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	1x
Fair PS Ratio	3.2x

Price-To-Sales vs Fair Ratio: EGHT is good value based on its Price-To-Sales Ratio (1x) compared to the estimated Fair Price-To-Sales Ratio (3.2x).

Share Price vs Fair Value

What is the Fair Price of EGHT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: EGHT ($5.21) is trading below our estimate of fair value ($15.23)

Significantly Below Fair Value: EGHT is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate EGHT's PEG Ratio to determine if it is good value.

Discover undervalued companies

Future Growth

How is 8x8 forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

11.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: EGHT is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: EGHT is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: EGHT is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: EGHT's revenue (13.1% per year) is forecast to grow faster than the US market (8.2% per year).

High Growth Revenue: EGHT's revenue (13.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: EGHT's Return on Equity is forecast to be high in 3 years time (24.2%)

Discover growth companies

Past Performance

How has 8x8 performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-27.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: EGHT is currently unprofitable.

Growing Profit Margin: EGHT is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: EGHT is unprofitable, and losses have increased over the past 5 years at a rate of 27% per year.

Accelerating Growth: Unable to compare EGHT's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: EGHT is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (26.8%).

Return on Equity

High ROE: EGHT has a negative Return on Equity (-96.17%), as it is currently unprofitable.

Discover strong past performing companies

Financial Health

How is 8x8's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: EGHT's short term assets ($275.6M) exceed its short term liabilities ($191.5M).

Long Term Liabilities: EGHT's short term assets ($275.6M) do not cover its long term liabilities ($536.4M).

Debt to Equity History and Analysis

Debt Level: EGHT's net debt to equity ratio (170.8%) is considered high.

Reducing Debt: Insufficient data to determine if EGHT's debt to equity ratio has reduced over the past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable EGHT has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: EGHT is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by 34.4% per year.

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Dividend

What is 8x8 current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate EGHT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate EGHT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if EGHT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if EGHT's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as EGHT has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure

CEO

Dave Sipes (55 yo)

1.5yrs

Tenure

US$6,670,866

Compensation

Mr. David D. Sipes, also known as Dave, serves as Chief Executive Officer and Director at 8x8, Inc. since December 10, 2020. Mr. Sipes serves as Director of PandaDoc Inc. since May 2020. He had been the Ch...

CEO Compensation Analysis

Compensation vs Market: Dave's total compensation ($USD6.67M) is above average for companies of similar size in the US market ($USD4.03M).

Compensation vs Earnings: Dave's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: EGHT's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: EGHT's board of directors are considered experienced (3.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: EGHT insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8%.

Data	Last Updated (UTC time)
Company Analysis	2022/07/01 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31