8x8 Inc. Stock Upgraded (EGHT)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- 8x8 (Nasdaq: EGHT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, solid stock price performance, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 33.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, 8X8 INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 74.38% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 109.3% when compared to the same quarter one year prior, rising from $0.83 million to $1.74 million.
  • Net operating cash flow has significantly increased by 302.63% to $4.44 million when compared to the same quarter last year. In addition, 8X8 INC has also vastly surpassed the industry average cash flow growth rate of 15.86%.
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8x8, Inc. develops and markets telecommunications services for Internet protocol (IP), telephony, and video applications. It also offers contact center, Web-based conferencing, and unified communications services, as well as cloud-based computing services. The company has a P/E ratio of 5.9, below the S&P 500 P/E ratio of 17.7. 8x8 has a market cap of $460.3 million and is part of the technology sector and telecommunications industry. Shares are up 103.2% year to date as of the close of trading on Wednesday.

You can view the full 8x8 Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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