Head-To-Head Comparison: 8X8 (NASDAQ:EGHT) and Zoom Communications (NASDAQ:ZM)

Zoom Communications (NASDAQ:ZM) and 8X8 (NASDAQ:EGHT) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Risk and Volatility

Zoom Communications has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, 8X8 has a beta of 1.81, indicating that its share price is 81% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Zoom Communications and 8X8, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zoom Communications	1	13	14	0	2.46
8X8	4	0	2	1	2.00

Zoom Communications presently has a consensus price target of $95.32, suggesting a potential upside of 15.73%. 8X8 has a consensus price target of $2.23, suggesting a potential upside of 28.16%. Given 8X8’s higher possible upside, analysts plainly believe 8X8 is more favorable than Zoom Communications.

Valuation and Earnings

This table compares Zoom Communications and 8X8″s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zoom Communications	$4.87 billion	4.98	$1.90 billion	$6.20	13.28
8X8	$715.07 million	0.34	-$27.21 million	($0.02)	-87.00

Zoom Communications has higher revenue and earnings than 8X8. 8X8 is trading at a lower price-to-earnings ratio than Zoom Communications, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Zoom Communications and 8X8’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zoom Communications	39.03%	11.88%	9.68%
8X8	-0.53%	20.12%	3.92%

Insider and Institutional Ownership

66.5% of Zoom Communications shares are owned by institutional investors. Comparatively, 94.0% of 8X8 shares are owned by institutional investors. 11.5% of Zoom Communications shares are owned by insiders. Comparatively, 2.0% of 8X8 shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Zoom Communications beats 8X8 on 10 of the 15 factors compared between the two stocks.

About Zoom Communications

Zoom Video Communications, Inc. provides unified communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company offers Zoom Meetings that offers HD video, voice, chat, and content sharing through mobile devices, desktops, laptops, telephones, and conference room systems; Zoom Phone, an enterprise cloud phone system; and Zoom Chat enables users to share messages, images, audio files, and content in desktop, laptop, tablet, and mobile devices. It also provides Zoom Rooms, a software-based conference room system; Zoom Conference Room Connector, a gateway for SIP/H.323 endpoints to join Zoom meetings; Zoom Events, which enables users to manage and host internal and external virtual events; OnZoom, a prosumer-focused virtual event platform and marketplace for Zoom users to create, host, and monetize online events; and Zoom Webinars to provide video presentations to large audiences from many devices. In addition, the company offers Zoom Developer Platform that enables developers, platform integrators, service providers, and customers to build apps and integrations using Zoom’s video-based communications solutions, as well as integrate Zoom’s technology into their products and services; Zoom App Marketplace, which helps developers to publish their apps, as well as third-party integrations of Zoom; and Zoom Contact Center, an omnichannel contact center solution. It serves individuals; and education, entertainment/media, enterprise infrastructure, finance, government, healthcare, manufacturing, non-profit/not for profit and social impact, retail/consumer products, and software/Internet industries. The company was formerly known as Zoom Communications, Inc. and changed its name to Zoom Video Communications, Inc. in May 2012. The company was incorporated in 2011 and is headquartered in San Jose, California.

About 8X8

8×8, Inc. engages in the provision of enterprise communication solutions. It offers solutions to the business services, education, financial services, government, healthcare, and manufacturing industries. The company was founded in February 1987 and is headquartered in Campbell, CA.