Craig-Hallum downgrades 8×8 to Hold, lowers price target to $4.50

As previously reported, Craig-Hallum analyst George Sutton downgraded 8×8 (EGHT) to Hold from Buy with a price target of $4.50, down from $7. While 8×8 has been ahead of the curve in many respects and will likely be proven right about how to address the evolution of Generative AI through an open ecosystem and embracing partnership over competition, the fast follower mentality and low innovation barriers has shortened the duration of a first mover advantage, Craig-Hallum argues. With RingCentral (RNG) following Zoom (ZM) with a “disruptively priced” Contact Center, the competitive landscape will likely only get more challenging. While in some cases the best product will win, the firm says it would be naive to assume that “disruptively priced” offerings won’t shake up the market. While this is more of a future impact, at the same time, the business in its current state is underperforming, Craig-Hallum adds, noting that CPaaS headwinds have continued and seem to be getting worse.