8x8’s Sales Outlook and Margins Raise Analyst Concerns

8x8 shares had gained 34.3% over six months by Sept. 30, beating the S&P 500 by 13.1%, according to StockStory. As of 17:52 UTC that day, the stock traded at $2.25, up 3.46% from its previous close.

StockStory’s analysis was cautious, citing billings of $188.8 million in Q2 and average year-over-year growth of 1.3% across the past four quarters. The publisher said billings indicate customer collections and argued the figures point to challenges in winning or retaining customers.

Analysts expect 8x8 revenue to rise 2.6% over the next 12 months, StockStory reported. That forecast is close to the company’s 5.9% annualized revenue growth over the past five years, but StockStory said it does not signal faster growth from newer products and services.

The publisher also said 8x8’s operating margin had generally stayed flat over the past two years. Its trailing-12-month operating margin was 3.1%.

StockStory noted that the shares traded at 0.4 times forward sales at $2.19 in its analysis. It described the valuation as optically cheap but argued that the company’s fundamentals leave significant downside risk.