At UC Today, we’re dedicated to keeping up with the latest happenings in the Unified Communications and Collaboration market. Recently, we noticed an interesting report from The Motley Fool, which highlighted the suddenly plunging prices of 8×8 shares. According to the Motley Fool, the prices for shares of the leading cloud-based communications company dropped suddenly on the 30th of January, falling by a total of 10%.
The price plunge came shortly after 8×8 revealed their third-quarter fiscal earning results, which included a decision to reduce their outlook predictions for the year.
Why the Sudden Dip in Worth?
An evaluation of the third-quarter results for 8×8 shows a revenue income of around $89.9 million, which, as the Motley Fool pointed out, translates to a loss of about $0.06 per share (non-GAAP loss of $5.5 million). Before these results were announced, industry analysts had suggested that company would generate about $88.6 million in sales, so 8×8 came out a little bit ahead.
Revenue from the services section of the 8×8 business saw a significant increase of around 20%, ($85.9 million), and sales from larger enterprise customers buying more than $10,000 worth of monthly-recurring solutions jumped up by an incredible 61%. What’s more, the service revenue for each business customer in the mid-market and enterprise section rose to $5,211. All-in-all, the third-quarter results don’t seem bad enough to prompt such a significant share price plunge.
Are People Losing Faith in 8×8?
If you’re wondering why 8×8 saw such a severe hit in the stock market at the end of January, your guess is as good as ours. According to CEO Vikram Verma, the company delivered a pretty substantial quarter of growth and development. The quarter ended with 8×8 ahead of their financial predictions, and, as Verma noted, 8×8 are also in the process of disrupting a market with significant potential for profit. The cloud solutions environment is a $50 billion space.
So, why the change of heart for 8×8 investors? The Motley Fool suggests that it might be something to do with 8×8’s decision to reduce their forecast for the complete fiscal year of 2019. The prediction was decreased only slightly, from a range of $334 million to $338 million to a range of $334 million to $335 million. The company has also predicted that it’s non-GAAP loss for 2019 to be around $19 million.
Additionally, for the fourth quarter of the year, 8×8 has suggested that service revenue will deliver between $886 million and $89.6 million, with a pre-tax non-GAAP loss of $7 to $8 million.
We’ll have to wait and see whether any further announcements shed light on the confusing situation in the share market for 8×8.
