8x8 EGHT shares have appreciated 37.5% in the past month, outperforming the Zacks Computer & Technology sector’s return of 3.7% and the Zacks Internet Software industry’s appreciation of 7.3%.
This global provider of cloud-based contact center as-a-service (CCaaS) and unified communications as-a-service (UCaaS) software has outperformed its closest peers like Zoom ZM, NICE NICE and RingCentral RNG, over the same timeframe. ZM, NICE and RNG shares have returned 10%, 8.8%, and 4.4%, respectively.
The outperformance can be attributed to EGHT’s terrific second-quarter fiscal 2025 results. Both earnings and revenues beat the Zacks Consensus Estimate comfortably.
Platform usage revenues surged more than 20% year over year, while sales of non-SMS products grew more than 50% year over year.
EGHT Outperforms Sector in the Past Month
Image Source: Zacks Investment Research
Sales of new products jumped more than 60% year over year, led by AI-based solutions, including Intelligent Customer Assistant and other solutions from EGHT’s technology partner ecosystem. Sales of these AI-based solutions increased more than 50% sequentially and over 200% year over year. Since the launch of Intelligent Customer Assistant, 8x8 has hosted more than 1 million interactions.
EGHT’s Prospects Ride on Strong AI-Powered Portfolio
EGHT’s prospects are bright, given an expanding AI-powered portfolio. In the fiscal second quarter, the company announced the availability of 8x8 Active Assessor, an expanded availability of Video Elevation capabilities for 8x8 Contact Center, and extended AI-enabled interaction summarization capabilities across the 8x8 Platform.
8x8 Active Assessor is an AI-powered housing association solution. Video Elevation capabilities for 8x8 Contact Center now enables contact center agents to visually diagnose and resolve issues. The extended AI-enabled interaction summarization capabilities will enable contact center agents to deliver more personalized interactions and faster wrap-up times.
8x8 is investing in AI insights that assess the full CX deployment through the process of identifying operational optimizations across both human and AI. It is integrating AI-based solutions seamlessly into its existing CX solutions. Expanding AI consulting services is a key catalyst.
Accelerating usage of AI tools is helping 8x8 win new logos that increased as a percentage of bookings in the fiscal second quarter. The majority of its top 20 new logo deals included CCaaS solutions. Increasing customer loyalty and reduced customer churn is expected to drive top-line growth.
8x8 has doubled the number of supported languages for live web chats and expanded text-to-speech capabilities to offer support for more than 40 languages. These initiatives are expected to boost users’ efficiency, employee productivity and customer satisfaction.
Rich Partner Base to Boost EGHT’s Top Line
8x8 expanding partner base is noteworthy. Its integration with Microsoft Teams has been a key catalyst. EGHT offers one of the broadest sets of enterprise voice integrations with Microsoft Teams. It also includes 8x8 Operator Connect and 8x8 Voice for Microsoft Teams. 8x8 currently supports more than 500,000 Teams users.
Regal.io has joined the 8x8 Technology Partner Ecosystem, which combines Regal.io's sophisticated sales dialing capabilities with 8x8’s comprehensive cloud contact center and unified communications platform.
EGHT is partnering with Descope, a drag-and-drop customer identity and access management platform. Descope’s no-code visual workflows enable businesses to help users authenticate, authorize, and add identity management into any app, preventing fraud and bot attacks.
EGHT’s Estimate Revision Shows Mixed Trend
The Zacks Consensus Estimate for fiscal 2025 earnings is pegged at 34 cents per share, up by a penny over the past 30 days.
The consensus mark for 2024 revenues is pegged at $719.94 million, indicating a 1.2% year-over-year decrease.
EGHT’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 11.70%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at 41 cents per share, down by a penny over the past 30 days, but indicates a 22.06% increase over fiscal 2025.
The consensus mark for fiscal 2026 revenues is pegged at $738.08 million, indicating a 2.51% year-over-year increase.
8x8 Inc Price and Consensus
8x8 Inc price-consensus-chart | 8x8 Inc Quote
EGHT Stock is Trading at a Discount
8x8 stock is cheap, as suggested by the Value Score of B.
In terms of the forward 12-month Price/Sales, EGHT is trading at 0.57X, lower than the broader sector’s 3.01X. It is also trading at a discount compared with NICE’s 3.91X, RNG’s 1.33X and ZM’s 5.37X.
P/S Ratio (F12M)
Image Source: Zacks Investment Research
8x8 shares are also trading above the 50-day and 200-day moving averages, indicating a bullish trend.
EGHT Shares Trade Above 50-Day & 200-Day SMA
Image Source: Zacks Investment Research
Conclusion
8x8’s expanding AI-powered portfolio, along with a strong partner base, are major growth drivers. A cheap valuation makes the stock attractive for investors.
8x8 currently sports a Zacks Rank #1 (Strong Buy), which implies that investors should start accumulating the stock right now. You can see the complete list of today’s Zacks #1 Rank stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
