William Blair analyst Arjun Bhatia has maintained their bullish stance on OOMA stock, giving a Buy rating yesterday.
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Arjun Bhatia has given his Buy rating due to a combination of factors surrounding Ooma’s strategic acquisition of Phone.com. This acquisition, valued at $23.2 million, is expected to significantly enhance Ooma’s customer base and market penetration, particularly in the small and medium business (SMB) sector. By adding approximately 36,000 customers and 87,000 users, Ooma is poised to expand its scale and competitive positioning in North America.
Furthermore, the acquisition is anticipated to contribute an additional $22 million to $23 million in revenue and $1.0 million to $1.5 million in adjusted EBITDA. This transaction, funded through a mix of balance sheet cash and bank debt, represents a financially disciplined approach with a favorable EBITDA multiple. The strategic move aligns with Ooma’s focus on market share growth and leverages Phone.com’s strong online presence and direct sales model to accelerate Ooma’s SMB growth. Overall, these factors underpin Bhatia’s positive outlook and Buy rating for Ooma’s stock.
Bhatia covers the Technology sector, focusing on stocks such as InterDigital, Atlassian, and Zeta Global Holdings Corp. According to TipRanks, Bhatia has an average return of -2.8% and a 36.76% success rate on recommended stocks.
In another report released yesterday, Lake Street also maintained a Buy rating on the stock with a $18.00 price target.