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Insider Buying in 8×8 (EGHT)

by | Jun 20, 2021

8×8 (EGHT) with a rare open market buy on 6/7 from CEO David Sipes of 43,000 shares at $23.47, a $1M investment. This is the first insider buys in the name since 2019 when former CEO Vikram Verma was active buying stock between $17 and $24. EGHT has traded poorly in 2021, down 20% YTD, but remains up over 70% over the last twelve months. The $2.76B company trades 140X earnings, 5.2X sales, and 18X cash. EGHT provides voice, video, chat, contact center, and enterprise-class API SaaS solutions. Their unified communications, team collaboration, and video conferencing are used by small businesses, mid-market, and large government agencies. EGHT recently announced a new strategic plan that includes shuttering some underperforming, low-margin businesses and focusing more on UCaaS. The company sees a massive opportunity in cloud communications over the next 2-3 years with an estimated TAM of $75B+. They see their X Integrated Solution helping bridge gaps for enterprise customers assisting both employee and customer experience. In FY22 their focus remains on expanding their platform, expanding their base through both cross-sell opportunities and retention, and executing on a Go-to-Market Strategy. Analysts have an average target for shares of $32 with a Street High $45 from Craig Hallum who cites new logos and strong demand for its Microsoft Teams related capabilities, a clear line of sight to sustainable free cash flow in 2H22, and more consistent execution under new CEO Sipes. Short interest is 16.85%. Hedge fund ownership fell 5.5%. Dorsal Capital, King Street, and Ranger Investment all buyers while Whale Rock Capital sold their entire 3.7M share position.

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