Head to Head Review: 8X8 (NASDAQ:EGHT) & Ooma (NYSE:OOMA)

8X8 (NASDAQ:EGHT) and Ooma (NYSE:OOMA) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of recent recommendations for 8X8 and Ooma, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
8X8	2	1	3	0	2.17
Ooma	0	1	4	0	2.80

8X8 currently has a consensus price target of $2.83, indicating a potential upside of 51.52%. Ooma has a consensus price target of $14.50, indicating a potential upside of 28.09%. Given 8X8’s higher probable upside, equities analysts plainly believe 8X8 is more favorable than Ooma.

Institutional and Insider Ownership

94.0% of 8X8 shares are held by institutional investors. Comparatively, 80.4% of Ooma shares are held by institutional investors. 1.1% of 8X8 shares are held by insiders. Comparatively, 9.8% of Ooma shares are held 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
8X8	-8.65%	-6.51%	-0.88%
Ooma	-2.04%	-2.22%	-1.13%

Volatility and Risk

8X8 has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, Ooma has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Earnings and Valuation

This table compares 8X8 and Ooma”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
8X8	$723.57 million	0.32	-$67.59 million	($0.55)	-3.40
Ooma	$248.16 million	1.20	-$830,000.00	($0.10)	-113.20

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

Summary

Ooma beats 8X8 on 8 of the 14 factors compared between the two stocks.

About 8X8

8×8, Inc. provides voice, video, chat, contact center, and enterprise-class application programmable interface (API) Software-as-a-Service solutions for small business, mid-market, enterprise customers, government agencies, and other organizations worldwide. It offers 8×8 Work, a self-contained end-to-end united communications solution that delivers voice services, secure video meetings, and unified messaging, including direct messages, public and private team messaging rooms, and peer-to-peer short and multimedia messaging; 8×8 Contact Center, a cloud-based contact center as-a-service solution; and 8×8 Engage, an artificial intelligence-powered solution that equips customer-facing employees outside the contact center with the tools and capabilities to deliver successful customer engagements. The company also provides 8×8 Communications Platform as-a-Service, a communications platform-as-a-service capabilities that enable businesses to directly integrate its platform services within their websites, mobile apps, and business systems for personalized customer engagement; and Solutions for Microsoft Teams. In addition, it offers and X1 through X4 and X5 through X8, which provide enterprise-grade voice, unified communications, and video meetings and team collaboration, and contact center solutions. The company markets its services to end users through industry conferences, trade shows, webinars, and local and digital advertising channels. 8×8, Inc. was incorporated in 1987 and is headquartered in Campbell, California.

About Ooma

Ooma, Inc. provides communications services and related technologies for businesses and consumers in the United States and Canada. The company's products and services include Ooma Office, a cloud-based multi-user communications system for small and medium-sized businesses; Ooma Connect, which delivers fixed wireless internet connectivity; and Ooma Enterprise, a unified-communications-as-a-service (UCaaS) solution. It also provides Ooma AirDial, a plain old telephone service; PureVoice HD, a residential phone services; Ooma basic that provides unlimited personal calling within the United States; and Ooma Premier, a suite of advanced calling features on a monthly or annual subscription basis. In addition, the company offers Ooma Telo, a home communications solution designed to serve as the primary phone line in the home; Ooma Telo Air, a wireless Ooma Telo with built-in Wi-Fi and Bluetooth; and Ooma Telo LTE, which combines the Ooma Telo base station with the Ooma LTE Adapter and battery back-up. Further, it provides Ooma Mobile HD app that allows users to make and receive phone calls and access Ooma features and settings; 2600Hz provides business communication applications; Talkatone mobile app; and OnSIP, an UCaaS solutions. The company offers its products through direct sales, distributors, retailers, and resellers, as well as online and sale representatives. Ooma, Inc. was incorporated in 2003 and is headquartered in Sunnyvale, California.