8x8, Inc. (EGHT), a company providing cloud-based enterprise-class software solutions, is reporting earnings tomorrow:(Source: TD Waterhouse)The company beat earnings estimates in 50% of time on the last eight quarters (and stayed in-line with the rest) and has shown swift movements in the market price of the stock: $EGHT, 8x8 Inc / 1440 The market participants expect the following numbers over the next few quarters, including the upcoming one:(Source: TD Waterhouse)On the other hand, market data show that the short-term options are relatively cheap:(Source: TD Waterhouse)The straddles (options with a strike price of $15) are worth around 10% of the current market price of the stock. Historically, the stock has been more volatile than that on a monthly basis over the last year:(Source: Google Finance. Calculations by author)As you can see, the stock has had a monthly standard deviation of 12% over the last 52 weeks, while the straddle expiring in a bit less than a month has an implied monthly volatility of around 10%, while it also includes volatility from the earnings event tomorrow. I therefore see signs of clear undervaluation in these options. I am looking forward to trying this trade tomorrow.