Critical Survey: Applied Digital (NASDAQ:APLD) versus 8X8 (NASDAQ:EGHT)

Applied Digital (NASDAQ:APLD) and 8X8 (NASDAQ:EGHT) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.

Risk and Volatility

Applied Digital has a beta of 4.29, suggesting that its share price is 329% more volatile than the S&P 500. Comparatively, 8X8 has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500.

Insider and Institutional Ownership

65.7% of Applied Digital shares are owned by institutional investors. Comparatively, 94.0% of 8X8 shares are owned by institutional investors. 23.7% of Applied Digital shares are owned by company insiders. Comparatively, 1.1% of 8X8 shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Applied Digital	-61.84%	-75.46%	-20.50%
8X8	-9.28%	-7.40%	-0.98%

Analyst Ratings

This is a breakdown of current ratings and price targets for Applied Digital and 8X8, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Digital	0	0	5	0	3.00
8X8	0	3	3	0	2.50

Applied Digital presently has a consensus target price of $9.60, indicating a potential upside of 126.42%. 8X8 has a consensus target price of $3.54, indicating a potential upside of 26.04%. Given Applied Digital’s stronger consensus rating and higher probable upside, equities analysts clearly believe Applied Digital is more favorable than 8X8.

Earnings & Valuation

This table compares Applied Digital and 8X8’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Digital	$55.39 million	9.40	-$44.65 million	($0.79)	-5.37
8X8	$728.71 million	0.48	-$67.59 million	($0.55)	-5.11

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

About Applied Digital

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.

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 and mid-size businesses, mid-market and larger enterprises, government agencies, and other organizations worldwide. It provides 8×8 Work, a self-contained end-to-end united communications solution that delivers enterprise voice with public switched telephone network connectivity, video meetings, and unified messaging, as well as direct messages, public and private team messaging rooms, and short and multimedia services; 8×8 Contact Center, a multi-channel cloud-based contact center solution; and 8×8 CPaaS, a set of global communications Platform-as-a-Service. The company also 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. It markets its services to end users through industry conferences, trade shows, Webinars, and digital advertising channels. The company was incorporated in 1987 and is headquartered in Campbell, California.