Shares of 8x8 (NYSE:EGHT) gained 9.5% today after several Wall Street analysts expressed optimism regarding the company's new CEO. The analysts reiterated existing ratings while increasing price targets.
- Needham: Maintaining buy rating, increasing price target from $21 to $35.
- BTIG: Reiterating buy rating, boosting price target to $35.
- Riley: Keeping neutral rating, raising price target from $15.25 to $25.
Yesterday, 8x8 named Dave Sipes, who was most recently serving as COO of RingCentral, as its new CEO, and reaffirmed its guidance for the fiscal third quarter. Outgoing CEO Vik Verma will remain as an advisor through the transition.
"We see the appointment as a game changer for EGHT," Needham analyst Richard Valera wrote in a research note to investors. "As one of the key architects and drivers of RNG's world-class execution across both product and go to market, Mr. Sipes is arguably the single best candidate for the EGHT CEO role."
Sipes can improve 8x8's operations and potentially justify a higher valuation from investors, according to Valera.
Riley analyst Josh Nichols acknowledges that the leadership change is a "significant positive" for the company, but believes the market is already pricing in the upside potential. 8x8 has seen sales growth decelerate while operating expenses remained excessive, in Nichols' view, so the transition should represent an opportunity for the communications technology company to turn things around.