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Why 8×8 Inc (NYSE:EGHT) Could Be A Buy

8×8 Inc (NYSE:EGHT), a software company based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $22.55 at one point, and dropping to the lows of $18.05. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether 8×8’s current trading price of $19.6 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at 8×8’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for 8×8

What is 8×8 worth?

According to my relative valuation model, the stock is currently overvalued. I’ve used the price-to-book ratio in this instance because there’s not enough visibility to forecast its cash flows, and its earnings doesn’t seem to reflect its true value. The stock’s ratio of 8.32x is currently well-above the industry average of 3.99x, meaning that it is trading at a more expensive price relative to its peers. In addition to this, it seems like 8×8’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What does the future of 8×8 look like?

NYSE:EGHT Future Profit June 26th 18
NYSE:EGHT Future Profit June 26th 18

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. 8×8’s earnings over the next few years are expected to increase by 57.39%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in EGHT’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe EGHT should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

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Are you a potential investor? If you’ve been keeping an eye on EGHT for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for EGHT, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on 8×8. You can find everything you need to know about 8×8 in the latest infographic research report. If you are no longer interested in 8×8, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.