We are initiating coverage of nine companies in the cloud communications space, assuming coverage of seven, and downgrading two. Our outlook on the space is more constructive than consensus, as we believe investors are underestimating the magnitude of enterprise cloud adoption.

Our cloud communications coverage universe comprises 16 names: We initiate coverage of BAND, EGHT, EVBG, HUBS, RNG, TWLO, VG, ZEN and ZM. We assume coverage of AUDC, AVYA, EVCM, FIVN, LPSN, SMWB, and ZETA, downgrading AVYA to Equal Weight and LPSN to Underweight.

Our framework: Our Overweights (BAND, EVBG, FIVN, RNG, VG, ZEN, and ZETA) are well positioned against one or more of our key themes: enterprise spending growth; enabling the higher-stakes digital customer service required by e-commerce; and the promising long-term prospects for cloud voice. By contrast, our Underweights (AUDC, LPSN) are struggling to navigate an aggressive competitive environment