8X8 Inc (EGHT) Skyrockets 23%; More Upside Ahead, Says Oppenheimer
Shares of cloud communications company 8X8 Inc (EGHT) had their best day in many days -- possibly their best day this year, judging from the stock chart -- on Thursday. Investors sent 8X8 stock up more than 20%.
8X8 Inc provides UCaaS (unified communications as a service) solutions and Voice over IP products (VoIP) for small and mid-size businesses and has over 1 million users worldwide. 8X8 has been on somewhat of a shopping spree, adding companies to its roster almost every year over the last decade, the most recent of which came last summer with the purchase of Wavecell, a Singapore-based global CPaaS (Communications Platform-as-a-Service) provider, for $125 million.
The company is forging ahead with new initiatives. On March 10, EGHT announced that it is launching its X Series and Contact Center services in Canada through direct sales and channel partners. The new services come off the back of large deals in the previous quarter, with 8X8 closing 40 new customer deals with ARR over $100K, a company record for a single quarter.
Oppenheimer’s Timothy Horan further notes that by 2027, cloud telephony deployments will make up 75% of all business lines, up from roughly 15% today, a paradigm shift 8X8 is well placed to benefit from.
The 5-star analyst added, “EGHT continues to gain traction up-market, as evidenced by enterprise customers increasing to 18% of ARR mix from 13% in FY4Q19. Enterprise ARR is growing the fastest at 85% vs mid-market at 45% and SMB at 18%. Mixed UCaaS/ CPaaS/Contact center bundles via X Series platform are helping to accelerate enterprise ARR growth to 85%, from 52% at the beginning of FY20.”
Horan puts a $29 price target on EGHT to go along with his Outperform rating. Should the $29 price target be met over the next year, the UCaaS provider could see its share price appreciate by a very strong 142%. (To watch Horan's track record, click here)
What does the Street make of 8X8’s prospects? A Moderate Buy consensus rating breaks down into 3 Buys and 3 Holds. The bulls have the edge, as the average price target comes in at $24.08 and suggests possible upside of a hefty 105%. (See EGHT price targets and analyst ratings on TipRanks)
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