What happened

Shares of 8x8 (NYSE:EGHT) plunged as much as 14.4% lower on Tuesday. The cloud-based communications expert reported results for the fourth quarter of fiscal year 2021, and they exceeded the Street's consensus targets by razor-thin margins. That wasn't good enough to impress 8x8's investors today.

So what

8x8 saw sales rise 19% year over year to $145 million. Adjusted earnings hit the break-even mark, up from a net loss of $0.12 per share in the year-ago quarter. Your average analyst was expecting a net loss of $0.01 per share on sales near $140 million.

Looking ahead, 8x8's management sees first-quarter revenue rising 18% to approximately $143 million. Non-GAAP operating margins should be positive throughout the next fiscal year, and full-year sales should land in the neighborhood of $600 million. The first-quarter guidance figures are comparable to the current Street view but analysts had been expecting full-year revenue closer to $614 million.

A blue network cord plugged into a cloud-shaped wall jack.

Image source: Getty Images.

Now what

Some worry that 8x8 may be running out of rocket fuel, as clients are finding plenty of alternative solutions in the cloud communications space. In particular, Craig-Hallum analyst George Sutton argues that Zoom is running away with the video-focused market while RingCentral dominates the race for very large client contracts through several helpful distribution deals. Craig-Hallum downgraded 8x8 from buy to hold today, lowering the stock's price target from $45 to $30 per share.

It's hard to argue against the competitive concerns, but we are still talking about a company with 19% revenue growth in the rearview mirror and another 18% top-line boost coming in the next report. You may even want to pick up a few shares of 8x8 while the stock is trading 35% below January's all-time highs.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.