8x8 (EGHT) PT Lowered to $2 at Evercore ISI

Evercore ISI analyst Peter Levine lowered the price target on 8x8 (NASDAQ: EGHT) to $2.00 (from $3.00) while maintaining a In Line rating.

The analyst comments "EGHT reported mixed FQ4 results alongside a weaker-than-expected initial FY26 outlook, which mgmt attributed to a cautious stance amid ongoing macroeconomic uncertainty. F4Q service revenue missed the mid-point of the guide by ~$1mn as mgmt noted as “chaos” in March and April in the US market with elongated deal cycles and smaller deal sizes, as customers were more cautious due to the uncertain economic and political environment. However, mgmt noted that May has been a much better month. We would note that international markets continue to chug along, largely unaffected by the internal US dynamics. We received clarity on the Fuze end-of-life timeline, which is expected to occur by the end of CY25, or by EGHT’s FQ3. Revenue from the Fuze platform now represents less than 5% of total service revenue, down from ~11% in F4Q24. Excluding Fuze-related revenue, core service revenue grew 2.8% in FY25, compared to 1.8% in FY24. However, the wind-down of Fuze will continue to create challenging comps through FY26. Mgmt offered a L/T target of achieving mid- to high-single-digit growth by FY28, driven by continued upmarket expansion, partner momentum, increased usage via AI product adoption, and broader multi-product penetration. Notably, the number of customers using three or more products grew 13% y/y, reaching over 700 in F4Q. Mgmt's commentary suggests that while the UC environment remains dynamic and challenging, business stabilization is possible if the company successfully executes on its product and go-to-market strategies to drive top-line growth. That said, the expected ROI remains uncertain, and any material impact is unlikely before FY27. Bottom line: EGHT remains a "show-me" story until there is clear evidence of revenue stabilization or reacceleration. With no major catalyst on the horizon and modest results so far, we expect the stock to remain range bound. While the company continues to make progress on deleveraging and cash flow generation, the key question is when topline growth will stabilize."

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