Gediminas Jasionis

8x8, Inc. (Nasdaq: EGHT) - a hot stock to buy?

by Gediminas Jasionis June 2, 2008
Voice over internet8x8, Inc. (Nasdaq: EGHT) operates as a developer of video and voice based telecommunication technologies and IP telephony. The company offers Packet8 broadband voice over Internet protocol (VoIP) and video communications and Packet8 Virtual Office services as well as videophone equipment. The Packet8 technology enables users to fully utilize their high speed internet by adding the digital voice and video communication services. The company currently serves over 11,000 other companies.

On May 20, 2008, 8x8 announced they have added a new call queuing function to their Packet8 Virtual Office small business phone service. This function will enable small companies to accept increased number of calls during the day by putting customers on hold, rather than sending them to voice mail. The service also offers music on hold, auto attendant, business class voicemail, and conference bridge. The service is also rather cheep - which makes it perfect for small businesses.

The announcement was followed by another news release. On May 21, 2008, 8x8 announced their 4th quarter results for the fiscal year ended March 31, 2008. Revenues for the quarter were $16.33 million, which represents a 14% increase compared to the 4th quarter of fiscal 2007. The company reported a net income of $691 thousand compared to a loss of $2.91 million over the same quarter a year ago.

EGHT chart

As reported in their latest SEC filing, the company has over $14.5 million in cash and marketable securities. Such capital appears to be sufficient to sustain the company over the coming 12 months. Also, with the positive cash flow from operations, 8x8 should be able to sustain their ongoing activities without additional debt financing, unless, they will need capital for expansion.

Based on financial performance and release of the product upgrade, 8x8 appears to be positioned for a long term growth, which should most definitely affect the share price to increase further. Most of the analysts seem to agree with such position .



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