William Blair Comments On 8×8 Following CFO Transition; Reiterates Outperform
In a research note issued to investors today, William Blair analyst Dmitry Netis reiterated an Outperform rating on 8×8 Inc (NASDAQ:EGHT), following the news that after 10 years of service, CFO Dan Weirich will be stepping down to join a cloud startup and will remain with 8×8 in an advisory role through the end of the year. No price target was provided.
Netis wrote, “While the move came as a surprise to us and caused a negative knee-jerk reaction in the stock, we recommend investors remain engaged, as 8×8 is executing well and is only getting better. The company reiterated its guidance for 25%-plus revenue growth for the current fiscal year (2015) and non-GAAP net income as a percentage of revenue in the high-single-digit range. After catching up with both outgoing and incoming CFOs, we have drawn several conclusions. First, while no formal CFO selection process was commenced by the board (which could trouble some investors), our impression is that Ms. Genovese is well-qualified to take on the reins as the CFO of the company and has a deep financial and operational knowledge of how to scale up the organization. She brings over 25 years of executive experience, including serving as CFO of a public company (Trimble), driving operational efficiencies, managing and completing several acquisitions, securing financing, and negotiating numerous strategic ventures. Best of all, as an insider, she comes at no added cost to the company and shareholders. Her long-standing relationship with the CEO ensures the duo will continue to thrive together. The storybook the two executives co-wrote at Savi—generating strategic interest in the company and selling it to Lockheed Martin—has a high likelihood of repeating itself, in our view, within the borders of the current venture. We have long held the view that this board and the new CEO continue to work for the benefit of its shareholders and seeking out alternatives to better maximize shareholder value. The good news is Ms. Genovese is stepping into a wellstructured finance organization and a well-oiled machine where she can focus on strategic tasks to extract greater value in the company. Her main focus, she notes, citing her tenure at Trimble, is to continue to enhance profitability and free cash flow of the company.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Dmitry Netis has a total average return of -6.9% and a 25.0% success rate. Netis is ranked #2855 out of 3319 analysts.