Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

8x8

(

EGHT

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified 8x8 as such a stock due to the following factors:

  • EGHT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.9 million.
  • EGHT has traded 72,341 shares today.
  • EGHT is trading at 2.15 times the normal volume for the stock at this time of day.
  • EGHT is trading at a new low 4.08% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on EGHT:

8x8, Inc. provides voice over Internet protocol (VoIP) technology and software as a service (SaaS) communication solutions in the cloud for small and medium businesses and mid-market and distributed enterprises. EGHT has a PE ratio of 209. Currently there are 7 analysts that rate 8x8 a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for 8x8 has been 666,900 shares per day over the past 30 days. 8x8 has a market cap of $737.1 million and is part of the technology sector and telecommunications industry. The stock has a beta of 0.51 and a short float of 5% with 6.23 days to cover. Shares are down 8.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates 8x8 as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • This stock has managed to rise its share value by 17.52% over the past twelve months.
  • The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 23.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has remained constant at $4.66 million with no significant change when compared to the same quarter last year. In addition, 8X8 INC has modestly surpassed the industry average cash flow growth rate of -0.86%.
  • 8X8 INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, 8X8 INC reported lower earnings of $0.02 versus $0.03 in the prior year. This year, the market expects an improvement in earnings ($0.14 versus $0.02).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry. The net income has significantly decreased by 6000.0% when compared to the same quarter one year ago, falling from $0.01 million to -$0.47 million.

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