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Ooma (OOMA)
NYSE:OOMA
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Ooma
(NYSE:OOMA)
64Neutral
Positive Factors
Financial Performance
Ooma reported better-than-expected F4Q25 results, with non-GAAP EPS and adj. EBITDA surpassing consensus expectations, which left the stock up 4% in the aftermarket.
Product Development
Ooma continues to gather critical acclaim for its product bouquet, with research firm Frost & Sullivan selecting Ooma AirDial as the 2025 Competitive Strategy Leader for Best Practices in the North American POTS Replacement Industry.
Strategic Partnerships
Ooma's sales partnerships are developing, with Frontier Communications selling Ooma Telo for residential POTS replacements and a large cable provider on track to sell AirDial.
Negative Factors
Guidance
Fiscal 2026 guidance fell short of consensus growth expectations with revenue guidance impacted by downsell at Ooma's largest customer.
Revenue Expectations
Full year F2026 top line is guided to $267-$270M, actually somewhat below Benchmark’s prior $275M estimate especially as immediate AirDial gains have been muted by an interregnum off Verizon’s pending acquisition of Frontier.
Ooma (OOMA) vs. S&P 500 (SPY)
Market Cap
$345.28M
Dividend YieldN/A
Average Volume (3M)149.42K
Price to Earnings (P/E)―
Beta (1Y)0.89
Revenue Growth8.50%
EPS Growth-743.51%
CountryUS
Employees1,186
SectorCommunication Services
Sector Strength73
IndustryTelecommunications Services
Share Statistics
EPS (TTM)-0.26
Shares Outstanding27,600,000
10 Day Avg. Volume143,571
30 Day Avg. Volume149,420
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.42
Price to Cash Flow (P/CF)11.10
P/FCF Ratio13.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.25Price Target Upside50.45% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Ooma Business Overview & Revenue Model
Company DescriptionOoma, Inc. is a telecommunications company that provides innovative communication solutions to both residential and business customers. The company operates in the technology and communication sectors, offering a range of products and services that include VoIP services, cloud-based communication platforms, and smart home security systems. Ooma's core products are designed to provide reliable, high-quality communication services that are both cost-effective and user-friendly.
How the Company Makes MoneyOoma generates revenue primarily through its subscription-based services. The company offers a variety of plans for both residential and business customers, which include monthly or annual fees for VoIP services, cloud-based communication tools, and additional features such as virtual faxing and conferencing. Ooma also sells hardware, such as VoIP adapters and smart security devices, which complement its service offerings. The company's earnings are further supported by partnerships with service providers and retailers, which help expand its market reach and customer base. Additionally, Ooma benefits from its focus on customer retention and expansion of services to existing clients, which contribute to its recurring revenue streams.
Ooma Financial Statement Overview
Summary
Ooma demonstrates solid revenue growth and strong cash flow generation, but profitability challenges persist. The balance sheet is healthy with manageable debt levels, supporting the company's growth potential. Continued focus on improving operational efficiency and profitability will be crucial for enhancing financial performance.Income Statement
Ooma has shown consistent revenue growth, with a TTM growth rate of 7.05%. However, profitability remains a concern as the company continues to report negative net income and EBIT margins, indicating ongoing operational challenges. The gross profit margin is strong at 59.52%, showing solid cost management relative to revenue.65
Positive
Balance Sheet
The balance sheet reflects a stable equity position with a debt-to-equity ratio of 0.15, suggesting moderate leverage. The equity ratio stands at 55.83%, indicating a strong asset base financed by equity. However, the company needs to improve profitability to enhance return on equity metrics.70
Positive
Cash Flow
Ooma's cash flow is strong, with significant growth in free cash flow, which has increased by 198.41% in the latest TTM period. The operating cash flow to net income ratio is positive, indicating effective cash management despite net losses. This indicates a robust ability to generate cash from operations.75
Positive
| Breakdown | |||||
| TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 253.43M | 256.85M | 236.74M | 216.16M | 192.29M | 168.95M | Gross Profit |
| 150.87M | 156.02M | 147.23M | 137.65M | 118.44M | 104.80M | EBIT |
| -7.81M | -6.94M | -3.29M | -5.76M | -1.93M | -2.77M | EBITDA |
| 4.09M | -6.94M | 8.18M | 3.28M | 5.43M | 4.60M | Net Income Common Stockholders |
| -9.71M | -6.90M | -835.00K | -3.65M | -1.57M | -2.44M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.63M | 17.87M | 17.54M | 26.86M | 31.28M | 28.31M | Total Assets |
| 29.04M | 149.19M | 159.25M | 131.00M | 109.25M | 89.10M | Total Debt |
| 6.29M | 12.23M | 29.68M | 14.04M | 14.45M | 2.81M | Net Debt |
| 665.00K | -5.64M | 12.14M | -10.09M | -5.21M | -14.48M | Total Liabilities |
| 37.07M | 63.92M | 81.17M | 67.86M | 58.20M | 49.55M | Stockholders Equity |
| -8.03M | 85.28M | 78.09M | 63.14M | 51.06M | 39.55M |
| Cash Flow | Free Cash Flow | ||||
| 18.25M | 20.16M | 6.11M | 3.56M | 2.45M | 1.21M | Operating Cash Flow |
| 24.27M | 26.61M | 12.27M | 8.77M | 6.66M | 4.37M | Investing Cash Flow |
| -9.04M | -6.45M | -35.33M | -6.15M | -4.89M | 229.00K | Financing Cash Flow |
| -16.98M | -19.82M | 16.45M | 1.84M | 601.00K | 1.02M |
Ooma Technical Analysis
Negative
12.13
Price Trends
14.12
Negative
14.19
Negative
12.30
Negative
Market Momentum
-0.28
Positive
38.81
Neutral
29.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OOMA, the sentiment is Negative. The current price of 12.13 is below the 20-day moving average (MA) of 13.40, below the 50-day MA of 14.12, and below the 200-day MA of 12.30, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 38.81 is Neutral, neither overbought nor oversold. The STOCH value of 29.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OOMA.
Ooma Risk Analysis
Ooma disclosed 62 risk factors in its most recent earnings report. Ooma reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ooma Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $345.28M | ― | -8.45% | ― | 8.50% | -743.51% | |
60 Neutral | $2.05B | ― | 16.58% | ― | 8.99% | 63.84% | |
60 Neutral | $362.95M | ― | -2.14% | ― | 24.52% | 61.08% | |
58 Neutral | $25.21B | 3.07 | -13.86% | 4.29% | 2.47% | -43.03% | |
51 Neutral | $241.66M | ― | -40.78% | ― | -2.23% | 19.48% | |
34 Underperform | $11.38M | ― | -403.74% | ― | -37.74% | -79666.67% |
* Communication Services Sector Average
Performance Comparison
OOMA
Ooma
12.13
4.19
52.77%
EGHT
8X8
1.72
-0.81
-32.02%
RNG
RingCentral
22.61
-10.36
-31.42%
BAND
Bandwidth
12.35
-5.35
-30.23%
SONM
Sonim Technologies
1.80
-4.35
-70.73%
Ooma Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -11.78% | Next Earnings Date: May 27, 2025
Earnings Call Sentiment Positive
Ooma's earnings call shows a positive outlook with strong financial growth in FY'25 and promising guidance for FY'26. The company has made significant progress in its POTS replacement segment and business subscriptions. However, challenges such as user churn and uncertainty in AirDial's revenue ramp present risks.Highlights
Solid Revenue and Non-GAAP Net Income Growth
For FY'25, Ooma achieved $256.9 million in revenue, representing an 8% year-over-year increase, and a 17% growth in non-GAAP net income year-over-year, reaching $18 million.
POTS Replacement Segment Success
Ooma AirDial received brand certification from Marriott Hotels and Resorts, positioning it as the preferred POTS replacement solution for Marriott's properties.
Business Subscription Growth
Business subscription and services revenue grew 13% year-over-year, with an average monthly subscription revenue per core user increasing by 4% year-over-year.
Strong Free Cash Flow
Ooma generated over $20 million in free cash flow in FY'25, a 230% increase over the previous year.
Positive Outlook for FY'26
Guidance for FY'26 includes expected total revenue of $267 million to $270 million, with 5% to 6% growth in business subscription and services revenue.
Lowlights
Churn and User Decline
Ooma experienced a sequential decline in total core users, primarily due to seat reductions with IWG, leading to a net dollar subscription retention rate decrease to 98%.
Challenges with AirDial Revenue Ramp
The pace of AirDial revenue ramp with new partners and customers remains uncertain, impacting revenue predictability.
Residential Subscription Revenue Decline
Residential subscription and services revenue declined by 1% year-over-year.
Company Guidance
During the call, Ooma Inc. provided guidance for the first quarter and full fiscal year 2026, projecting total revenue between $267 million to $270 million, with the business subscription and services revenue expected to grow by 5% to 6%. They anticipate the residential subscription revenue to decline by 1% to 2%. For Q1 2026, revenue is forecasted between $64.7 million to $65.1 million. The company projects non-GAAP net income for fiscal 2026 in the range of $22 million to $23.5 million, with adjusted EBITDA estimated between $27.5 million to $29 million, reflecting an adjusted EBITDA margin close to 11%. Ooma expects non-GAAP diluted EPS for the full fiscal year to range from $0.77 to $0.82, assuming approximately 28.6 million weighted average diluted shares outstanding. Their guidance reflects anticipated churn from IWG in Q1 and cautious expectations for the ramp-up of AirDial revenue with new partners.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.