New Stock Pick: 8×8 Inc. (EGHT)

By: ispeculatornew
Date posted: 01.27.2008 (1:33 pm) | Write a Comment  (2 Comments)

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EGHT – 8×8 Inc. (Nasdaq) – (Closing Price on Friday 1/25/08 – $1.20) 

8×8 Inc. is a company I have been following for a few quarters and I think now is an opportune time to buy some shares.

8×8 Inc. is a VoIP company that enables broadband internet users to add digital voice and video communications to their high speed internet connections. The company also offers a hosted communications solution, Packet8 Virtual Office, which delivers digital voice services coupled with powerful features for small and medium sized businesses and call centers.

The amount of companies subscribing to Packet8 Virtual Office has been quickly growing over the past year. On January 8 of 2007, 8×8 Inc. reported over 6,000 companies subscribed to Packet8 Virtual Office and earlier this year 8×8 Inc. reported over 10,000 companies were using Packet8 Virtual Office.

8×8 Inc. also got an influx of residential customers last year when a couple of other VoIP companies (SunRocket and an unnamed company) went out of business and referred their customers to 8×8 Inc.

8×8 Inc. has reported sequential increases in revenue for the last several quarters and reported a profit of $0.01 a couple of quarters ago. They posted a loss of 0.04 last quarter but this was related to the acquisition of nearly 25,000 former SunRocket subscribers during that quarter. The company provided free equipment and shipping and no activation fees to these new customers.

The CEO of 8×8 Inc. said in the Q2 earnings release “while the former SunRocket customers had a one-time negative impact on our bottom line to get them signed up on our network, we expect these new Packet8 customers will add greatly to revenues and net income in future quarters.”

According to Yahoo Finance the average analyst estimate is for a loss of 0.02 in the upcoming quarter but I don’t think 8×8 Inc. is too far away from being consistently profitable.

8×8 Inc. has received a couple of analyst upgrades already this year so the potential of 8×8 Inc. hasn’t gone unnoticed.

I am going to give a buy recommendation at Friday’s closing price. I don’t own any shares of 8×8 Inc. but if I had some spare money I would definitely be buying shares of 8×8 Inc. for myself.

Disclaimer: I have no position in EGHT.

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2 Comments

  1. Comment by JIRDAN — January 27, 2008 @ 5:05 pm

    Wow. What a crappy report. You must be one of the idiot pumping longs from the yahoo message boards.

  2. Comment by admin — January 27, 2008 @ 7:39 pm

    The comments on my website are moderated but I will allow your critism. Do you care to elaborate why my analysis is crappy or are you just against anyone who is long EGHT?

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