Wells Fargo cut 8×8 Inc.(EGHT:NYE) to $11 from $15

STA Research
by: STA Research
8x8 inc stock

Wells Fargo cut 8×8 Inc. to $11 from $58, and maintained the Underweight rating on the company’s stock price.

Last month,  Morgan Stanley maintained the Equal-Weight rating on the stock, and cut the target on the stock to $16 from $18. 

Based on the 8×8 Inc stock forecasts from 9 analysts, the average analyst target price for 8×8 Inc is USD 18.81 over the next 12 months. 8×8 Inc’s average analyst rating is Hold . Stock Target Advisor’s own stock analysis of 8×8 Inc is Very Bearish, which is based on 0 positive signals and 7 negative signals. At the last closing, 8×8 Inc’s stock price was USD 10.25. 8×8 Inc’s stock price has changed by -0.87% over the past week, -4.21% over the past month and -70.23% over the last year.

8×8, 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. It offers unified communications, team collaboration, video conferencing, contact center, data and analytics, communication APIs, and other services. The company provides 8×8 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; 8×8 Contact Center, a multi-channel cloud-based contact center solution; and 8×8 Meet, a cloud-based video conferencing and collaboration solution that enables secure and continuous collaboration with borderless high definition video and audio communications from mobile and desktop devices. It also offers 8×8 Team Messaging, an integrated open team messaging platform, which facilitate modern modes of communication with support for direct messages, public and private team messaging rooms, short messaging service, presence, emojis, and ?@ mentions’; 8×8 CPaaS, a set of global communications Platform-as-a-Service; and X1 through X4 and X5 through X8, which provide enterprise-grade voice, unified communications, and video meetings and team collaboration, and contact centre solutions. The company 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. 8×8, Inc. was incorporated in 1987 and is headquartered in Campbell, California.

What we like:

There is no particular fundamental attribute we can mention that we like

What we don’t like:

Low market capitalization

This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

Poor risk adjusted returns

This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns , the returns are unpredictable. Proceed with caution.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced compared to book value

The stock is trading high compared to its peers median on a price to book value basis.

Highly leveraged

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Negative cashflow

The company had negative total cash flow in the most recent four quarters.

Low Earnings Growth

This stock has shown below median earnings growth in the previous 5 years compared to its sector

 

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