What Happened:
Shares of business communications software company 8x8 (NYSE:EGHT) fell 7.12% in the after-market session after the company reported fourth-quarter sales that missed analysts' estimates, with revenue growth remaining weak. On a brighter note, earnings per share beat by an impressive 23%. Gross margin also rose, surpassing estimates. Revenue guidance for the next quarter and full year missed Consensus. However, guidance for operating income beat, and the full year operating income guidance was raised. Management highlighted the focus on driving business efficiency, adding that "we continued to invest in innovation while reducing our service delivery costs and increasing operational efficiency across the organization." While the improvements in profitability margins and an increase in full-year operating income guidance may appeal to investors, the weak revenue growth is likely to have subdued the overall market sentiment.
What is the market telling us:
8x8's shares are very volatile and over the last year have had 88 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
8x8 is down 26.3% since the beginning of the year, and at $3.20 per share it is trading 61.4% below its 52-week high of $8.28 from May 2022. Investors who bought $1,000 worth of 8x8's shares five years ago would now be looking at an investment worth $148.15.
Is now the time to buy 8x8? Access our full analysis of the earnings results here, it's free.