EGHT
8x8, Inc.
$2.20
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 69.0% below fair value
You pay
$2.20
Bear
$7.09
Fair
$7.09
Bull
$7.79
Bear
$7.09
+222.5%
3% stage 1 growth, 12% discount
Fair
$7.09
+222.5%
3% stage 1 growth, 12% discount
Bull
$7.79
+254.0%
4% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
28%
Implied Market Multiple
9.6x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $19.77 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $7.09 per share.
Warnings
Wall Street's average price target is $19.77 (from 28 analysts). Our estimate is 85% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions