- Communications firm 8x8 (NYSE:EGHT) is 9.6% lower today after its fiscal fourth-quarter results, which brought a mixed reaction from analysts despite beating revenue expectations and eking out a bare non-GAAP pretax profit.
- Craig-Hallum downgraded the stock to Hold, highlighting the company's return to break-even profitability but expecting hurdles in the long-term strategy. The decision to shut down the wholesale communications platform-as-a-service business will set up a $15M headwind to growth this year, it says.
- The desired revenue acceleration the company wants from its spending-for-growth initiative probably won't kick in until fiscal 2023, analyst George Sutton says. He has confidence in execution, but 8x8 is facing a more competitive industry, and he's hitting the sidelines until a refocused go-to-market strategy offers some results. The firm cut its price target to $30.
- Mizuho is Neutral on the stock and has a price target of $25, slightly below the current $25.45. While service revenue and annual recurring revenue accelerated from last quarter, they're still "significantly" below fiscal 2020 levels, it notes: "While it is encouraging to hear the detailed strategic vision of the company, we view the competition as posing a meaningful challenge for growth."
- Morgan Stanley is intrigued by the long-term plan, but that "meters growth expectations" for now, and brings in some execution risk, it says. It has an Equal Weight rating but a $35 price target (now implying 37% upside after today's tumble).
- Earnings call presentation
- Earnings call transcript