Domo’s Mixed Outlook: Balancing Strategic Partnerships and Growth Challenges

Analyst Derrick Wood from TD Cowen maintained a Hold rating on Domo (DOMO – Research Report) and keeping the price target at $10.00.

Derrick Wood has given his Hold rating due to a combination of factors that reflect both potential and caution for Domo’s future performance. Despite some positive developments, such as improved deal activity and strategic partnerships, notably with Snowflake, there remains a need for time to significantly enhance the growth trajectory. The recent financial performance, with revenue growth at a standstill and operational margins slightly above expectations, indicates a mixed outlook.
Domo’s efforts to shift towards consumption pricing and expand its partner channel relationships are promising, yet challenges persist, particularly with customer churn and budget constraints. The company’s focus on cost containment and adjustments in sales headcount are steps towards better market positioning, but the overall turnaround is still in progress. Given these dynamics and the current valuation, Wood sees a constructive near-term setup but advises a cautious approach, hence the Hold rating.