Shares of Ooma (OOMA) have gained 2.1% over the past four weeks to close the last trading session at $11.93, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $18.63 indicates a potential upside of 56.2%.The mean estimate comprises four short-term price targets with a standard deviation of $0.95. While the lowest estimate of $18.00 indicates a 50.9% increase from the current price ...

Core Viewpoint - Ooma (OOMA) shares have increased by 5.5% recently, closing at $11.61, with analysts suggesting a potential upside of 60.5% based on a mean price target of $18.63 [1] Price Targets - The average price target consists of four estimates ranging from $18.00 to $20.00, with a standard deviation of $0.95, indicating a potential increase of 55% to 72.3% from the current price [2] - A low standard deviation suggests a strong agreement among analysts regarding the price targets, which can be a useful indicator for further research [2][9] Analyst Sentiment - Analysts are increasingly optimistic about Ooma's earnings prospects, as indicated by a positive trend in earnings estimate revisions, which historically correlates with stock price movements [4][11] - Over the past 30 days, the Zacks Consensus Estimate for the current year has risen by 28.6%, with four estimates moving higher and no negative revisions [12] Zacks Rank - Ooma holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, suggesting a strong potential upside [13] Conclusion on Price Targets - While the consensus price target may not be a reliable measure of the stock's potential gain, it does provide a directional guide for price movement [14]

Core Viewpoint - Ooma, Inc. has successfully acquired Phone.com for approximately $23.2 million in cash, enhancing its smart communications platform for businesses and consumers [1] Financial Impact - Phone.com is projected to generate annual revenue of $22-$23 million and adjusted EBITDA of $1.0-$1.5 million, contributing positively to Ooma's financials starting December 26, 2025 [2] - The acquisition is expected to be accretive to Ooma's Adjusted EBITDA and non-GAAP earnings per share [2] Company Overview - Phone.com, headquartered in Newark, New Jersey, serves small and medium-sized businesses with cloud communications and UCaaS solutions, catering to approximately 36,000 customers and 87,000 users across North America [3] - Ooma offers various communication services, including Ooma Office for businesses, Ooma AirDial for replacing traditional phone lines, and Ooma Telo for residential consumers [10]

Company Overview - Ooma, Inc. is an American company based in Sunnyvale, California, with over 20 years in business [1] - The company provides cloud-based voice and communications services, including VoIP phone systems for home, business, and mobile users [1] Investment Focus - The analysis primarily focuses on small- to mid-cap companies, which are often overlooked by many investors [1] - Occasionally, the analysis includes large-cap companies to provide a broader perspective on the equity markets [1]

Company Overview - Ooma, Inc. is an American company based in Sunnyvale, California, with over 20 years in business [1] - The company provides cloud-based voice and communications services, including VoIP phone systems for home, business, and mobile users [1] Investment Focus - The analysis primarily focuses on small- to mid-cap companies, which are often overlooked by many investors [1] - Occasionally, the analysis includes large-cap companies to provide a broader perspective on equity markets [1]

Core Viewpoint - Ooma (OOMA) shows potential for significant upside, with a mean price target of $18.63 indicating a 56.8% increase from its current price of $11.88, supported by positive earnings estimate revisions and analyst agreement [1][11]. Price Targets and Analyst Estimates - The mean price target consists of four short-term estimates with a standard deviation of $0.95, suggesting a consensus among analysts. The lowest estimate is $18.00 (51.5% increase), while the highest is $20.00 (68.4% increase) [2][9]. - Analysts have shown strong agreement in revising earnings estimates higher, with four estimates moving up in the last 30 days and no negative revisions, leading to a 23.1% increase in the Zacks Consensus Estimate [12][11]. Analyst Behavior and Market Sentiment - There is skepticism regarding the reliability of price targets, as they often mislead investors. Analysts may set overly optimistic targets due to business incentives, which can inflate expectations [3][8]. - Despite the skepticism, a tight clustering of price targets indicates a high degree of agreement among analysts about the stock's price direction, which can serve as a starting point for further research [9][10]. Zacks Rank and Investment Potential - OOMA holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, suggesting a strong potential for upside in the near term [13]. - While the consensus price target may not be a definitive indicator of potential gains, the implied direction of price movement appears to be a useful guide for investors [14].

Financial Performance - Total revenue for the third quarter of fiscal 2026 was $67.6 million, representing a 4% year-over-year increase, primarily driven by growth in Ooma Business[94] - GAAP net income for the quarter was $1.4 million, compared to a net loss of $2.4 million in the prior year quarter, indicating operational improvement[94] - Adjusted EBITDA for the third quarter was $8.6 million, an increase from $5.7 million in the prior year quarter[94] - Total revenue for the three months ended October 31, 2025, was $67,625,000, representing a 4% increase from $65,127,000 in the same period of 2024[116] - Net income for the three months ended October 31, 2025, was $1,393,000, compared to a net loss of $2,364,000 in the same period of 2024[115] - For the nine months ended October 31, 2025, the company reported a net income of $2.5 million, a significant improvement from a net loss of $6.6 million in the same period of 2024[135] Revenue Breakdown - Subscription and services revenue from Ooma Business grew 6% year-over-year, mainly due to user growth[94] - Subscription and services revenue increased by $1,818,000 or 3% year-over-year, primarily due to an increase in AirDial lines and average revenue per core user[117] - Product and other revenue rose by $680,000 or 14% year-over-year, mainly driven by an increase in AirDial shipments[118] - Annualized exit recurring revenue (AERR) increased to $242.7 million, up from $234.0 million year-over-year, driven by a higher average revenue per core user[95] - The gross margin for subscription and services remained consistent at 70% year-over-year[122] Cash and Liquidity - As of October 31, 2025, total cash and cash equivalents were $21.7 million, up from $17.9 million as of January 31, 2025[94] - Cash provided by operating activities decreased by $1.8 million year-over-year to $16.99 million, primarily due to working capital impacts from the timing of payments[135] - Cash used in investing activities was $4.0 million, a decrease of $0.7 million year-over-year, mainly due to reduced fixed asset additions[137] - Cash used in financing activities was $9.1 million, down $5.8 million year-over-year, reflecting no repayments of borrowings under the 2023 Credit Agreement in the current period[138] - As of October 31, 2025, the company had zero outstanding borrowings under the 2023 Credit Agreement, which allows for borrowing up to $30.0 million, potentially increasing to $50.0 million[139] Expenses and Cost Management - Total operating expenses decreased by 5% to $39,437,000 for the three months ended October 31, 2025, compared to $41,556,000 in 2024[126] - Research and development expenses decreased by $2,133,000 or 15% year-over-year, primarily due to a reduction in personnel and contractor-related costs[128] Acquisitions and Growth Strategy - Ooma completed the acquisition of FluentStream for approximately $45.0 million in cash, expected to accelerate growth in Ooma Business[91] - The company anticipates subscription and services revenue growth as it expands its user base, particularly through the FluentStream acquisition[104] - The initial term loan of $45.0 million was used to finance the FluentStream acquisition, with future borrowings intended for other acquisitions and working capital[139] Customer Metrics - Core users decreased to 1,233 as of October 31, 2025, down from 1,242 a year earlier, primarily due to a decline in Ooma Residential users[95] - The net dollar subscription retention rate remained stable at 99% year-over-year, reflecting strong customer retention[95] Non-Cash Charges and Working Capital - Non-cash charges for the nine months ended October 31, 2025, totaled $21.1 million, primarily related to stock-based compensation and depreciation[135] - The company experienced an increase of $0.8 million in accounts receivable and $2.3 million in inventories due to the timing of cash collections and inventory costs[136] - Deferred revenue increased by $0.4 million, indicating growth in future revenue recognition[136]

Core Viewpoint - Ooma's stock price fell 11.7% despite beating earnings expectations, primarily due to a significant miss in sales figures [1][3]. Financial Performance - Ooma reported fiscal Q3 2026 earnings of $0.27 per share, surpassing analyst expectations of $0.22, but sales were only $67.6 million compared to the forecast of $71.4 million [1][3]. - Year-over-year sales growth was 4%, and GAAP profits improved from a loss of $0.09 to a profit of $0.05 per share [3]. - The discrepancy between GAAP and non-GAAP earnings raises concerns about the sustainability of reported profits [3][6]. Market Position - Ooma's current stock price is $11.25, with a market capitalization that reflects a high earnings multiple of 55 times projected earnings [4][7]. - The company's guidance for fiscal 2026 projects revenues between $270.3 million and $270.9 million, with earnings between $1 and $1.02 per share, although these figures are non-GAAP [5][6]. Analyst Sentiment - Analysts predict that Ooma's GAAP earnings for the year may not exceed $0.20 per share, indicating potential weakness in overall profitability [6].

Core Insights - Ooma, Inc. is a prominent smart communications platform known for its VoIP solutions, focusing on innovation and customer service to maintain its market position [1] Financial Performance - For the quarter ending December 8, 2025, Ooma reported earnings per share (EPS) of $0.05, which was below the expected $0.22 [2] - The company's revenue for the same period was $67.63 million, slightly exceeding the Zacks Consensus Estimate of $67.58 million, marking a 3.8% year-over-year increase driven by growth in the subscription and services sector [2] - Subscription and services revenue reached $62 million, accounting for 92% of total revenue, highlighting the company's strategic focus on this segment [2] Valuation Metrics - Ooma's price-to-sales ratio stands at 1.31, indicating that investors are willing to pay $1.31 for every dollar of sales [3] - The enterprise value to sales ratio is 1.28, reflecting the company's valuation including debt and excluding cash [3] Financial Health - The company has a debt-to-equity ratio of 0.13, suggesting a low level of debt relative to its equity [4] - Ooma's current ratio is 1.19, indicating sufficient liquidity to meet short-term liabilities [4]

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh. ...