What Happened?
Shares of cloud communications provider 8x8 (NASDAQ: EGHT) fell 5.2% in the afternoon session after investor concerns grew over its financial health and growth prospects following several downbeat financial reports.
Multiple analyses highlighted fundamental weaknesses within the company. Reports noted that 8x8's average billings growth over the last year was a weak 1.3%, with sales projected to remain flat over the next 12 months. Further compounding concerns, the company's revenue declined by 8% over the past year. The firm's balance sheet also came under scrutiny, with one report pointing to a "heavy debt load," evidenced by a high net debt to EBITDA ratio of 6.1. Profitability remains a challenge, with the company reporting negative earnings per share and a negative net margin, suggesting difficulties in managing costs effectively.
The shares closed the day at $2.11, down 5.2% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy 8x8? Access our full analysis report here, it’s free.
What Is The Market Telling Us
8x8’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 3.1% on the news that a significant downward revision in U.S. job creation data fueled concerns about a weakening labor market. The Bureau of Labor Statistics announced that the economy added 911,000 fewer jobs in the 12 months through March 2025 than previously reported. While this is a preliminary annual revision, it effectively halves the job growth previously thought to have occurred during that period. The update has amplified fears among investors that the job market is faltering. This weaker economic outlook is now reinforcing expectations that the Federal Reserve will cut interest rates to support the economy. According to the CME FedWatch Tool, the odds of a 25-basis-point rate cut at the next Fed meeting now stand at 90%, as a cooling labor market gives the central bank more reason to ease monetary policy.
JPMorgan Chase CEO Jamie Dimon added that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched given his influence as head of one of the nation's largest banks.
8x8 is down 21.1% since the beginning of the year, and at $2.10 per share, it is trading 39.5% below its 52-week high of $3.47 from February 2025. Investors who bought $1,000 worth of 8x8’s shares 5 years ago would now be looking at an investment worth $134.53.
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