Since January 2026, 8x8 has been in a holding pattern, posting a small return of 3.6% while floating around $1.98. The stock also fell short of the S&P 500’s 9% gain during that period.

Is now the time to buy 8x8, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free.

Why Do We Think 8x8 Will Underperform?

We don’t have much confidence in 8x8. Here are three reasons why EGHT doesn’t excite us, plus one stock we’d rather own.

1. Weak Billings Point to Soft Demand

Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

8x8’s billings came in at $185.2 million in Q1, and over the last four quarters, its year-on-year growth averaged 4.6%. This performance was underwhelming and suggests that increasing competition is causing challenges in acquiring/retaining customers.

2. Projected Revenue Growth Shows Limited Upside

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect 8x8’s revenue to stall, close to its 6.7% annualized growth for the past five years. This projection doesn’t excite us and suggests its newer products and services will not lead to better top-line performance yet.

3. Operating Margin in Limbo

While many software businesses point investors to their adjusted profits, which exclude stock-based compensation (SBC), we prefer GAAP operating margin because SBC is a legitimate expense used to attract and retain talent. This is one of the best measures of profitability because it shows how much money a company takes home after developing, marketing, and selling its products.

Looking at the trend in its profitability, 8x8’s operating margin might have fluctuated slightly but has generally stayed the same over the last two years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Its operating margin for the trailing 12 months was 2.6%.

Final Judgment

8x8 falls short of our quality standards. With its shares underperforming the market lately, the stock trades at 0.4× forward price-to-sales (or $1.98 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are better investments elsewhere. We’d recommend looking at one of our all-time favorite software stocks.

Stocks We Would Buy Instead of 8x8

ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.

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Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.