Increased Earnings for 8x8 in Q1, Yet Margin Constriction Persists
In the world of cloud communications, 8x8 (NASDAQ: EGHT) has been a notable player, trading around the $1.84–$2.03 range over the past year. Despite some fluctuations, the company's market cap remains steady at approximately $250 million.
Recent analyst sentiment towards 8x8 has been mixed but generally optimistic. Some analysts have upgraded the stock from a "Hold" to a "Buy" candidate, citing short-term positive signals and a potential for upward movement to around $2.03 and higher resistance levels. However, other analysts have issued more cautious or negative ratings, including "Sell," "Underperform," and "Underweight," with price targets ranging mostly between $1.50 and $2.00. The consensus rating remains neutral ("Hold") with an average target price around $2.49.
Rosenblatt Securities, for instance, maintains a "Buy" rating and lowered their price target from $2.70 to $2.50, implying approximately 42% upside potential, reflecting some confidence in near-term growth.
However, it's important to note that the author does not predict future market trends that could affect 8x8's share price, nor does he suggest a buy, sell, or hold recommendation for 8x8 shares.
The shares of 8x8, despite their volatility, are considered cheap at the current market cap. The stock price showed a slight recent decline of about -0.54% on August 15, 2025, closing at $1.84.
In terms of financial performance, 8x8 reported mixed earnings with a Q3 2025 EPS of $0.04, beating estimates of $0.01, although trailing EPS remains negative at -$0.16. Earnings are expected to grow significantly (around 150% increase to $0.10 EPS next year). Recent Q1 revenue slightly exceeded estimates by 2.36%, indicating some operational improvement. Key fundamental metrics like Return on Equity stand at about 12.53%, showing reasonable profitability.
The competitive landscape for 8x8 is not analysed in this article.
Investors should weigh the mixed signals and consider the stock's volatility and relatively small market capitalization before making investment decisions. The future outlook for 8x8 hinges on the company's ability to sustain earnings growth and operational improvements in a competitive cloud communications market.
[1] Source: Yahoo Finance [2] Source: Seeking Alpha [3] Source: TipRanks [4] Source: MarketWatch [5] Source: GuruFocus
- With the mixed ratings from analysts such as Rosenblatt Securities suggesting upside potential, there might be opportunities for investing in 8x8, a notable player in the cloud communications business, as long as investors are aware of the stock's volatility and relatively small market cap.
- In the finance sector, 8x8's business model, though showing operational improvements, remains under close scrutiny due to its mixed earnings, with negative trailing EPS and questions about its ability to sustain growth in a competitive cloud communications market.
