NEW YORK (TheStreet) -- Shares of 8x8 Inc. (EGHT) are higher by 6.15% to $7.59 early Tuesday afternoon following the company's announcement that its U.K. subsidiary 8x8 Solutions has been accepted as a cloud communications services supplier by Crown Commercial Services, a government agency.
8X8 develops and markets telecommunications services for Internet protocol telephony and video applications.
8x8 Solutions was accepted onto the CSS G-Cloud 5 framework, which is designed to encourage the adoption of cloud services across the whole of the public sector, the company said.
Separately, TheStreet Ratings team rates 8X8 INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate 8X8 INC (EGHT) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 28.6%. 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.
- EGHT's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.17, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for 8X8 INC is currently very high, coming in at 73.28%. Regardless of EGHT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EGHT's net profit margin of -5.43% significantly underperformed when compared to the industry average.
- Net operating cash flow has decreased to $3.34 million or 42.31% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The share price of 8X8 INC has not done very well: it is down 10.70% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full analysis from the report here: EGHT Ratings Report