Why 8x8 (EGHT) Could Be Positioned for a Slump? - Tale of the Tape

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is 8x8 Inc. (NASDAQ: EGHT), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in EGHT.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 3 estimates moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from 8 cents a share a month ago to its current level of 4 cents.

However, for the current quarter, 8x8 has not seen any movement in estimate revisions for the past 30 days and earnings estimate is currently pegged at 1 cent per share.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 17.8% in the past month.

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don't have a long time horizon to wait.

If you are still interested in the Communications components sector, you may instead consider some better-ranked stocks including ShoreTel, Inc. (NASDAQ: SHOR), Harmonic Inc. (NASDAQ: HLIT) and Premiere Global Services, Inc. (NYSE: PGI). ShoreTel sports a Zacks Rank #1 (Strong Buy), while Harmonic and Premiere Global Services hold a Zacks Rank #2 (Buy). These stocks may be better selections at this time.

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8X8 INC (NASDAQ: EGHT): Free Stock Analysis Report
 
SHORETEL INC (NASDAQ: SHOR): Free Stock Analysis Report
 
HARMONIC INC (NASDAQ: HLIT): Free Stock Analysis Report
 
PREMIERE GLOBAL (NYSE: PGI): Free Stock Analysis Report
 
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