Stock story –
What happened?
Shares of business communications software company 8×8 (NYSE:EGHT) rose 26.3% in the morning session after the company reported strong third-quarter earnings that beat analyst expectations for EBITDA and billings. Management noted strong growth in the use of existing solutions, which contributed to better retention. The trend continues as the company also sees growth in sales of new products.
On the other hand, revenue expectations for the next quarter were not in line with analyst expectations, but the market seems willing to overlook this. Overall, this quarter had some significant positives.
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What the market tells us
8×8 stock is extremely volatile and has had 48 moves of more than 5% in the past year. But moves of this magnitude are rare, even for 8×8, and indicate that this news has significantly affected the market’s perception of the company.
The biggest move we wrote about in the past year was three months ago, when shares fell 39% on news that the company reported second-quarter earnings results. Full-year revenue expectations fell short of expectations, and revenue expectations for the next quarter were not in line with Wall Street expectations. Additionally, all key operating metrics we track fell below Wall Street estimates during the quarter, including revenue, billings, ARR (annual recurring revenue), adjusted operating income and EPS. Overall, this was a weaker quarter for 8×8.
8×8 is down 21.3% since the beginning of the year and at $2.89 per share is trading 25.9% below its December 2023 52-week high of $3.90. Investors who bought $1,000 five years ago bought shares of 8×8 would now be looking at an investment worth $149.59.
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