8x8 Inc. rises after analyst upgrade
Shares of 8x8 Inc. (Nasdaq: EGHT) ended the day higher on news that investment bank MDB Capital Group upgraded the provider of telecommunication services and technology for Internet protocol telephony and video applications to “buy” from “neutral.”
“We are encouraged by the company’s recent mobile calling plan and other efforts the company has undertaken to position 8x8 for long-term growth,” wrote Joel Achramowicz, vice president of equity research at MDB Capital Group, in a research note. “At this time 8x8 shares seem compelling.”
Also today, the Santa Clara, Calif.-based company announced that its Packet8 Virtual Office, a phone system for small- to medium-sized businesses, had more than 10,000 subscribers as of the end of December 2007.
“We are very pleased to have reached this new milestone with our Packet8 Virtual Office service,” said sales and marketing VP Huw Rees in a statement. “In addition to the ‘micro business’ customer we have been serving all along, we are now seeing escalating interest from larger corporations that operate from multiple locations.”
However, analyst Joel Achramowicz warned in his research note that the VoIP (voice over internet protocol) market is subject to rapid technological change and 8x8 depends on the introduction of new products and services to maintain and grow its business.
Additionally, the company, which was established in 1987, could become the target of costly and time consuming patent infringement lawsuits.
Furthermore, Achramowicz warns that 8x8 has a history of losses and has limited cash liquidity that will most likely require it to raise additional capital in order to achieve profitability.
The company posted losses during all four quarters of 2007 and Achramowicz does not expect it to break even until the second half of 2008.
At close, shares of 8x8 Inc. (EGHT) had added $0.12, or 13%, to $1.01. The 52-week high of $1.84 was reached on Jan. 30, 2007, while the 52-week low of $0.84 was set on Dec. 28, 2007.
