Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at 8x8 (NASDAQ:EGHT) and the best and worst performers in the video conferencing industry.
Work is becoming more distributed, both across geographies and devices. In order for businesses to keep functioning efficiently, they need to be able to communicate as well as they did when the teams were co-located, which drives the demand for integrated communication platforms.
The 4 video conferencing stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 0.7% below.
Luckily, video conferencing stocks have performed well with share prices up 17.5% on average since the latest earnings results.
8x8 (NASDAQ:EGHT)
Founded in 1987, 8x8 (NYSE:EGHT) provides software for organizations to efficiently communicate and collaborate with their customers, employees, and partners.
8x8 reported revenues of $181 million, down 2.2% year on year. This print exceeded analysts’ expectations by 1.5%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates but a slight miss of analysts’ annual recurring revenue estimates.
"We are pleased to report a solid quarter, with results that reflect the early signs of success of our investments in innovation and our transformation strategy," said Samuel Wilson, Chief Executive Officer at 8x8, Inc.
8x8 delivered the slowest revenue growth and weakest full-year guidance update of the whole group. Interestingly, the stock is up 37.5% since reporting and currently trades at $3.19.
Is now the time to buy 8x8? Access our full analysis of the earnings results here, it’s free.
Best Q3: Five9 (NASDAQ:FIVN)
Started in 2001, Five9 (NASDAQ: FIVN) offers software as a service that makes it easier for companies to set up and efficiently run call centers, and offer more tailored customer support.
Five9 reported revenues of $264.2 million, up 14.8% year on year, outperforming analysts’ expectations by 3.6%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
Five9 achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 29.9% since reporting. It currently trades at $42.64.
Is now the time to buy Five9? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: RingCentral (NYSE:RNG)
Founded in 1999 during the dot-com era, RingCentral (NYSE:RNG) provides software as a service that unifies phone, text, fax, video calls and chat in one platform.
RingCentral reported revenues of $608.8 million, up 9.1% year on year, exceeding analysts’ expectations by 1.1%. Still, it was a mixed quarter as it posted annual recurring revenue in line with analysts’ estimates.
RingCentral delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 6.1% since the results and currently trades at $41.13.
Read our full analysis of RingCentral’s results here.
Zoom (NASDAQ:ZM)
Started by Eric Yuan who once ran engineering for Cisco’s video conferencing business, Zoom (NASDAQ:ZM) offers an easy to use, cloud-based platform for video conferencing, audio conferencing and screen sharing.
Zoom reported revenues of $1.18 billion, up 3.6% year on year. This result surpassed analysts’ expectations by 1.2%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.
The company added 62 enterprise customers paying more than $100,000 annually to reach a total of 3,995. The stock is down 3.6% since reporting and currently trades at $85.80.
Read our full, actionable report on Zoom here, it’s free.
Market Update
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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