3SOF

AP
8x8 Surges on Upgrade
Wednesday September 20, 12:45 pm ET 
8x8 Shares Climb After Analyst Says Stock "Just Too Cheap"


NEW YORK (AP) -- Voice over Internet Protocol service provider 8x8 Inc. shares jumped in Wednesday afternoon trading after a Merriman Curhan Ford analyst said "sometimes a stock is just too cheap" and upgraded it.
Analyst Colby Synesael raised the stock to "Buy" from "Neutral" and said that although he is concerned "about the company's long-term growth opportunity," the stock should trade inline with its fair value.

"Although we think the stock is greatly undervalued -- which we previously attributed to bankruptcy risk -- it is still not clear to us that 8x8 will be successful with its virtual office strategy and therefore its ability to meaningfully grow revenue long term," Synesael wrote in a note to clients.

Shares of 8x8, which have traded between 65 cents and $3.39 over the past 52 weeks, were up 15.2 percent, or 15 cents, at $1.14 per share on the Nasdaq.

All these EGHT threads should be merged with this main one here
started by Fous

Rams please Merge........

Out of time for tonight, will leave you the chart.

some more chart work here

1. Introduction

I was looking to study less than $5 stocks and EGHT pop on my technical and fundamental screens. I've traded this in the past, who would say it would go as low as $0.65  . Anyway, the chart looks bullish and, to my surprise, fundamentals never stopped improving. Then why the share price collapse? I guess when a stock is bought like EGHT was on those two days in December 05 (47 million shares changed hands in those two days) and it fails to advance, people will then bail out whatever the fundamental picture is, they just can't stand the price decline anymore !

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2. Profile

VoIP (voice over internet protocol) service provider 8x8, Inc. (EGHT) offers internet-based telephony solutions ( www.packet8.net ) for individual residential and business users as well as small to medium sized business organizations. In addition to regular Packet8 VoIP service plans priced as low as $19.99 per month for unlimited anytime calling to the U.S. and Canada, 8x8 offers the Packet8 DV 326 VideoPhone, the industry's first stand alone broadband consumer videophone, and accompanying monthly service plans also priced at $19.99 per month. Packet8 Virtual Office, 8x8's VoIP system for small to medium sized businesses, is a hosted PBX solution comprised of powerful business class features. Companies subscribing to Virtual Office pay just $39.99 per month per extension for enterprise class PBX functionality along with unlimited local and long distance calling in the U.S. and Canada. Packet8 Softalk(TM), 8x8's PC-based soft phone client, offers high quality voice and video in-network calling as well as outbound calling to the PSTN. For additional company information, visit 8x8's web site at www.8x8.com.

3. Technical Analysis
3.1. All History Chart



Nothing surprising on this EGHT all history chart. Since it was a technology related stock, it had its bubble in 2000 and then collapsed.

3.2. Medium Term Chart



The stock had huge bull runs in the past, but it couldn't sustain those high prices. The recent advance phase seems more moderate, is it supported by fundamentals? We'll get to that in a moment.

3.3. Short Term Chart



EGHT's short term chart is showing a strong ascending trend. Volume picks up in every white marubozu along the way. No meaningful gaps were left open.

4. Fundamental Analysis
4.1. Number of Shares Outstanding



Since these are quarterly numbers, I can't call the increase in the number of outstanding shares "moderate". Unfortunately the company is issuing shares, and the market cap is growing faster than the share price advance implies.

Anyway, the current market cap is just 61.4 million * $1.75 = $107 M.

4.2. Liquidity



The balance sheet is getting a bit weak here, but still $9 M in working capital.

4.3. Revenues



This is the part I like most, ten consecutive quarters of revenue growth. Revenue expectation for the full fiscal 2007 (it ends on March 07) is $55 M.

4.4. Net Income



Well, the company lost money every quarter since 2004, but this latest quarter it cut its losses  in half. Is EGHT turning the corner to profitability?

5. General Overview

Read this excerpts from published news:

- "8x8 Reports 5,000 U.S. Businesses Now Use the Packet8 Virtual Office Phone Service. According to 8x8 Vice President of Sales and Marketing Huw Rees, the adoption rate of the Packet8 Virtual Office service by U.S. based businesses has increased dramatically over the past twelve months, with nearly 1,000 new businesses added in the last quarter alone."

- "Packet8 Virtual Office Business Phone System to Be Sold Through Office Depot Stores Nationwide. Beginning this month (November), Office Depot's stores and website will carry the Packet8 Virtual Office business phone service package for $79.99 (after $50 mail-in rebate)."

- ""Our focus on the business space with Virtual Office affords 8x8 a sustainable and attractive business model. This is evidenced by our gross margins, which grew strongly to 52% for the quarter, and the decreasing customer churn we are seeing due to this segment of our service," continued Mr. Martin."

I think it is becoming apparent, especially from the quarterly revenue numbers, that EGHT now has a successful business model (check their website). This wasn't the case for many years, since the company became public in 1997.

I think this company's business model is one of those "the more, the more", that is, the more costumers they have, the easier it will be to get more (because if you're using a VOIP service, you want everybody else to use it to, to save more on your calls).

Revenues rose an average of 129% for the past 2 years. If this growth continues, EGHT will have revenues of $660 M in 3 years, and its market cap can be 12 times larger than it is now.

I'm a believer in VOIP and I think EGHT can be an attractive long term investment. My biggest worry is dilution. Dilution can make the market cap grow, indeed, by 12 times over the next 3 years, and yet the share price only doubles, for example. So, if I decide to invest on EGHT, I'll watch the number of shares issued and outstanding like a hawk.

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David...Very interesting stock pick. Thank you for the detailed analysis. here is another chart that shows the history.
Thanks

Holding at the 50-day MA...
This "baby" will definitely be one of 2007 small cap winners.
If you are still in doubt who is the best in VOIP sector, check the following link:
http://broadgen.com/voip_quick_view.htm

I hope you realize that the stock broke above 50 day EMA line on a huge volume. Translation... hurry up before EGHT breaks 1.90 and never looks back.
Now you still have time with EGHT shares while price is still "playing" with 50-day MA

Seriously, EGHT may jump before Nasdaq correction is over on good revenue projections, it will soon become cashflow positive,  it will be to late then to play catch-up.
Manage your risk though. If price closes below 50 Day MA, 2 or more consecutive days on large volume, reduce your long positions in EGHT.

52wk Range: 0.65 - 2.07
Volume: 3,443,352
Avg Vol (3m): 1,093,700

Technicals
13-day EMA Cross Above 50-day MA........
Percentage Gainer

Last Price Quote is:
9.50%above 13-day MA
10.67%above 50-day MA
RS Rating: 95 

Fundamentals
Earnings Expected on Feb 1

Key Data:
Market Cap (M): $72.93 
P/E Ratio: NA 
PEG Ratio: N/A 
Next Earnings: N/A
Last Analyst Rating: N

"EGHT" Threads have been Merged.
Please use the search before starting new threads on a Stock Pick.
Chances are a thread already exist.
So why not post whatever you have to comment about on that pick to that thread.
"Simplicity" My fellow traders.                        
All history on a stock pick in 1 thread is awesome.                      
Just trying to get threads together,so we don't have a numerous amount floating around on the same stock.   
Thank You....and good luck with all your trades....make some $$$           

You better believe it Setravis, and by the way, thanks for the heads up - I picked up some at 1.58 the other day and I'm certainly smiling now 

EGHT closed above the recent spike high of 1.72, which is a positive sign tfor this move.  it did top out at 1.84 resistance, but recent highs of 1.95 ar not so far away...

I was looking at this and it made me think.  If EGHT makes a measured move here, the last rally was for a total gain of 1.28 (i.e. from a low of .67 to a high of 1.95)  After pulling back in november and december it found support at the 1.20 level, making a low of 1.12.  A measured move from here would put a 2.40 target IN PLAY

I anticipate a bit of a struggle between 1.84 and 1.95.  But I'm with you, and am looking for this one to break recent highs soon.

Cheers!!!! 

Good luck to you ScottishTrader....

VOIP ready to move...JMHO of course...
Consolidation by telecoms to make this one profitable in 07' Target 3.67
Last call for EGHT train -- next stop 1.90
Do not despair. There is still time. The EGHT train is increasing it's speed.
If the "steamer" of NASDAQ correction does not fall off the cliff draggin' all techs down, we will see the EGHT train taking off and making the next stop "mild resistance" at $1.90, before heading to $2.50 to $2.60 or above.
Again, if NASDAQ blues don't spoil the picture, passengers of EGHT train are heading to some "Green pastures...of milk and honey". So, if you are reading this post you should consider getting some EGHT shares.

52wk Range: 0.65 - 2.01
Volume: 2,076,449
Avg Vol (3m): 1,105,990

Technicals
Percentage Gainer

Last Price Quote is:
15.53%above 13-day MA
22.98%above 50-day MA
RS Rating: 94 

Fundamentals
Earnings Expected on Feb 1

Key Data:
Market Cap (M): $72.93 
P/E Ratio: NA 
PEG Ratio: N/A 
Next Earnings: N/A
Last Analyst Rating: Neutral

Got in on Jan 25th @ 1.59
I'm confident though RSI & CCI rather high at this moment
this stock will overcome the foreseen struggle mentioned by Scott

Will keep in mind Setravis suggestions abt the price closing under
the 50MA for two consecutive days.

GLTA

Will be looking for an entry in this tomorrow. Hopefully it doesnt run up to fast without me.

Havent entered a position going to wait for earnings which come out tomorrow at 9am. Keep a close eye on the volume if the earnings results are better then expected we can see EGHT surge on high volume.

Again.......
"EGHT" Threads have been Merged.
Please use the search before starting new threads on a Stock Pick.
Chances are a thread already exist.
So why not post whatever you have to comment about on that pick to that thread.
"Simplicity" My fellow traders.                         
All history on a stock pick in 1 thread is awesome.                        
Just trying to get threads together,so we don't have a numerous amount floating around on the same stock.   
Thank You....and good luck with all your trades....make some $$$            

I expect a huge rally startting either this PM or tomorrow as earnings approach. Friday  will be crazy. It could close above $1.65 on Friday.

There is a reason why EGHT is reporting 1 month earlier and has so many presentations next week.......and the reason(s) must ge good for tghe company and the stock.