Critical Analysis: 8X8 (NASDAQ:EGHT) & Consensus Cloud Solutions (NASDAQ:CCSI)

8X8 (NASDAQ:EGHT) and Consensus Cloud Solutions (NASDAQ:CCSI) are both small-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Valuation & Earnings

This table compares 8X8 and Consensus Cloud Solutions”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
8X8	$735.75 million	0.46	$1.65 million	$0.05	46.10
Consensus Cloud Solutions	$349.70 million	2.19	$84.53 million	$4.94	8.70

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

Profitability

This table compares 8X8 and Consensus Cloud Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
8X8	0.98%	31.61%	7.06%
Consensus Cloud Solutions	26.42%	300.98%	13.75%

Institutional & Insider Ownership

94.0% of 8X8 shares are held by institutional investors. Comparatively, 93.9% of Consensus Cloud Solutions shares are held by institutional investors. 2.1% of 8X8 shares are held by company insiders. Comparatively, 3.6% of Consensus Cloud Solutions shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

8X8 has a beta of 1.91, meaning that its stock price is 91% more volatile than the S&P 500. Comparatively, Consensus Cloud Solutions has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for 8X8 and Consensus Cloud Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
8X8	0	2	2	0	2.50
Consensus Cloud Solutions	0	1	2	0	2.67

8X8 presently has a consensus price target of $3.12, suggesting a potential upside of 35.57%. Consensus Cloud Solutions has a consensus price target of $45.00, suggesting a potential upside of 4.76%. Given 8X8’s higher possible upside, equities research analysts clearly believe 8X8 is more favorable than Consensus Cloud Solutions.

Summary

Consensus Cloud Solutions beats 8X8 on 8 of the 13 factors compared between the two stocks.

About 8X8

8×8, Inc. provides cloud-based communications and customer experience services for businesses. Its platform brings together business phone, video meetings, team messaging and contact center capabilities, helping organizations manage employee and customer interactions. The company also offers communications application programming interfaces (APIs) that businesses can use to add voice, messaging and related communications features to their own applications. Its services are designed for organizations ranging from small businesses to large enterprises.

About Consensus Cloud Solutions

Consensus Cloud Solutions provides cloud-based digital information delivery and exchange services for healthcare organizations, businesses and government agencies. Its offerings include cloud fax solutions that allow users to send and receive documents electronically, along with tools designed to support secure data exchange and workflow integration. The company’s products include eFax and eFax Corporate, as well as solutions for connecting information systems and exchanging data. Its services are used in healthcare settings to help organizations share patient and administrative information, and in other industries for document-based communications.