8x8 (EGHT) Is Today's Strong On High Volume Stock

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 or Stephanie Link.

Trade-Ideas LLC identified 8x8 ( EGHT) as a strong 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 $6.6 million.
  • EGHT has traded 1.1 million shares today.
  • EGHT is trading at 2.16 times the normal volume for the stock at this time of day.
  • EGHT is trading at a new high 6.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 unified communications and collaboration (UCC) services in the cloud for small and medium businesses, and mid-market and distributed enterprises. Currently there are 8 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 794,800 shares per day over the past 30 days. 8x8 has a market cap of $614.9 million and is part of the technology sector and telecommunications industry. Shares are down 36.1% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates 8x8 as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 1.7%. Since the same quarter one year prior, revenues rose by 29.6%. 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.
  • Compared to its price level of one year ago, EGHT is down 31.46% to its most recent closing price of 7.28. Looking ahead, our view is that this company's fundamentals will not have much impact either way, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The gross profit margin for 8X8 INC is currently very high, coming in at 74.79%. 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 0.02% is significantly lower than the industry average.
  • 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 99.6% when compared to the same quarter one year ago, falling from $2.14 million to $0.01 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, 8X8 INC's return on equity significantly trails that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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