October 12, 2023
Top 10 Stock 8x8 Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: 8x8 – Top 10 Stock in Dow Jones U.S. Telecommunications Index
8x8 is listed as a top 10 stock on October 12, 2023 in the market index D.J. US Telecom because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 51 (high 51% performer), Obermatt assesses an overall buy recommendation for 8x8 on October 12, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Application Software |
| Index | D.J. US Telecom |
| Size class | Medium |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View 8x8 Buy
| 360 METRICS | October 12, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 86 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 52 |
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| SENTIMENT | ||||||||
| SENTIMENT | 16 |
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| 360° VIEW | ||||||||
| 360° VIEW | 51 |
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ANALYSIS: With an Obermatt 360° View of 51 (better than 51% compared with alternatives), overall professional sentiment and financial characteristics for the stock 8x8 are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for 8x8. The consolidated Value Rank has an attractive rank of 86, which means that the share price of 8x8 is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 86% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 52. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 16. Professional investors are more confident in 84% other stocks. The consolidated Growth Rank also has a low rank of 47, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 53 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 51, 8x8 is better positioned than 51% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 86), and the financing structure is on the safer side (Safety Rank of 52). However, sentiment in the professional investor community is below-average (Sentiment Rank of 16), as is the growth momentum for the company (Growth Rank of 47). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for 8x8 negative
ANALYSIS: With an Obermatt Sentiment Rank of 16 (better than 16% compared with alternatives), overall professional sentiment and engagement for the stock 8x8 is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for 8x8. Analyst Opinions are at a rank of 13 (worse than 87% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in 8x8. But the Professional Investors rank is low at 48, which means that professional investors hold less stock in this company than in 52% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 30, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 70% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 16 (less encouraging than 84% compared with investment alternatives), 8x8 has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: 8x8 Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 86 (better than 86% compared with alternatives) for 2023, 8x8 shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for 8x8. Price-to-Sales (P/S) is 95, which means that the stock price compared with what market professionals expect for future sales is lower than for 95% of comparable companies, indicating a good value regarding 8x8's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 94% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 55. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than 8x8 (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 86, is a buy recommendation based on 8x8's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: 8x8 Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), 8x8 shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for 8x8. Profit Growth, with a rank of 58 (better than 58% of its competitors), and Capital Growth, with a rank of 98, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 15, which means that, currently, professionals expect the company to grow less than 85% of its competitors, and Stock Returns are at a rank of 21. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: 8x8 Debt Financing Safety above-average
| SAFETY METRICS | October 12, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 15 |
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| REFINANCING | ||||||||
| REFINANCING | 69 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 55 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 52 |
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ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company 8x8 has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of 8x8 is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for 8x8. Refinancing is at 69, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 69% of its competitors. Liquidity is also good at 55, meaning the company generates more profit to service its debt than 55% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 15, which means the company has an above-average debt-to-equity ratio. It has more debt than 85% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), 8x8 has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and 8x8 could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: 8x8 Top Financial Performance
| COMBINED PERFORMANCE | October 12, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 86 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 55 |
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| COMBINED | ||||||||
| COMBINED | 77 |
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ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% compared with investment alternatives), 8x8 (Application Software, USA) shares have much better financial characteristics than comparable stocks. Shares of 8x8 are a good value (attractively priced) with a consolidated Value Rank of 86 (better than 86% of alternatives), are safely financed (Safety Rank of 52, which means low debt burdens), but show below-average growth (Growth Rank of 47). ...read more
RECOMMENDATION: A Combined Rank of 77, is a strong buy recommendation based on 8x8's financial characteristics. As the company 8x8's key financial metrics exhibit good value (Obermatt Value Rank of 86) but low growth (Obermatt Growth Rank of 47) while being safely financed (Obermatt Safety Rank of 52), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 86% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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