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Ooma
(NYSE:OOMA)
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Rating:68Neutral
Price Target:
$21.00
▲(33.67% Upside)
Action:Downgraded
Date:06/10/26
The score is driven primarily by improving financial performance (return to profitability and strong free cash flow) and a constructive earnings outlook supported by AirDial momentum and raised/affirmed non-GAAP guidance. The main offsets are a weak near-term technical setup and a demanding valuation (high P/E with no dividend yield), plus execution risks around negative product margins and installation timing.
Positive Factors
Strong cash generation
Consistent, growing operating and free cash flow provides durable financial flexibility. With FCF materially exceeding reported earnings and recent buybacks and debt paydown, Ooma can reinvest in product rollouts, fund installs, or strengthen the balance sheet without relying on external financing.
Negative Factors
Negative product gross margins
Persistently negative product margins materially erode consolidated profitability since hardware-related losses offset subscription strength. If component inflation and early MyPhone costs persist, the company must either subsidize installs or accept lower consolidated margins until scale or cost relief arrives.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent, growing operating and free cash flow provides durable financial flexibility. With FCF materially exceeding reported earnings and recent buybacks and debt paydown, Ooma can reinvest in product rollouts, fund installs, or strengthen the balance sheet without relying on external financing.
Read all positive factors
Ooma (OOMA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$535.97M
Dividend YieldN/A
Average Volume (3M)345.04K
Price to Earnings (P/E)60.0
Beta (1Y)0.80
Revenue Growth11.70%
EPS GrowthN/A
CountryUS
Employees1,186
SectorTechnology
Sector Strength88
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.33
Shares Outstanding27,500,000
10 Day Avg. Volume345,322
30 Day Avg. Volume345,036
Financial Highlights & Ratios
PEG Ratio-0.27
Price to Book (P/B)3.48
Price to Sales (P/S)1.18
P/FCF Ratio14.65
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue1.82
Enterprise Value/Gross Profit2.97
Enterprise Value/Ebitda21.62
Forecast
1Y Price Target
$23.75Price Target Upside51.18% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)1.29
Revenue Forecast (FY)$322.82M
Ooma Business Overview & Revenue Model
Company Description
Ooma, Inc. delivers a diverse range of communication solutions and associated technological innovations to both commercial clients and individual users across the United States and Canada. For businesses, Ooma offers an array of solutions. These i...
How the Company Makes Money
Ooma primarily makes money by selling subscription-based communications services and related add-ons. A major portion of revenue is generated from recurring service fees paid by business customers for cloud phone/UC subscriptions, typically priced...
Ooma Earnings Call Summary
Earnings Call Date:May 26, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Aug 27, 2026
Earnings Call Sentiment Positive
The call communicated a strong quarter with meaningful revenue and profitability upside driven by AirDial momentum, improved ARPU and retention, successful integration and contribution from acquisitions, strong cash generation, and strategic product launches (Ooma AI, MyPhone). Key operational risks include negative product gross margins (expected to worsen due to component inflation and early MyPhone costs), uncertainty in the timing of AirDial installations, and dependence on carrier POTS shutdown timing. Overall, positives (robust growth, record EBITDA, cash flow, ARPU gains, and promising product initiatives) outweigh the lowlights, though some execution and macro cost risks remain.Positive Updates
Revenue Growth Exceeds Expectations
Total revenue for Q1 grew 25% year-over-year to approximately $81.8 million, above guidance; full-year fiscal 2027 revenue guidance raised to $326.0M–$328.5M.
Negative Updates
Negative Product Gross Margin and Expected Pressure
Product & other gross margin was negative 31% in Q1 (improved from -41% YoY) but company expects worse product margins later in the year due to higher component costs and early MyPhone launch effects; management suggested modeling product margin around -40% for the full year.
Read all updates
Q1-2027 Updates
Positive
Negative
Revenue Growth Exceeds Expectations
Total revenue for Q1 grew 25% year-over-year to approximately $81.8 million, above guidance; full-year fiscal 2027 revenue guidance raised to $326.0M–$328.5M.
Read all positive updates
Company Guidance
Ooma issued non‑GAAP guidance for Q2 FY27 and full‑year FY27: for Q2 they expect total revenue of $81.6–$82.3M (including $6.3–$6.7M of product & other), non‑GAAP net income of $9.4–$9.8M and non‑GAAP diluted EPS of $0.33–$0.34 (assuming ~28.9M diluted shares); for FY27 they now expect total revenue of $326.0–$328.5M (business subscription & services growth of ~31% YoY, residential subscription revenue flat to down 1%), about 92% of revenue from subscription & services, non‑GAAP net income of $37.5–$39.0M, adjusted EBITDA of $45.0–$46.5M, and non‑GAAP diluted EPS of $1.29–$1.34 (assuming ~29.1M diluted shares). Management emphasized the guidance is on a non‑GAAP basis (excluding stock‑based comp, amortization of intangibles and acquisition‑related items), said it is being conservative on AirDial installation timing, and noted product & other gross margin pressure in H2 (they modeled roughly –40% product margin for the year).Ooma Financial Statement Overview
Summary
Income Statement
71
Positive
Balance Sheet
78
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 289.72M | 273.60M | 256.85M | 236.74M | 216.16M | 192.29M |
| Gross Profit | 177.70M | 167.24M | 156.02M | 147.23M | 137.65M | 118.44M |
| EBITDA | 24.43M | 18.58M | 6.20M | 8.18M | 3.28M | 5.43M |
| Net Income | 9.18M | 6.46M | -6.90M | -835.00K | -3.65M | -1.57M |
Balance Sheet | ||||||
| Total Assets | 226.86M | 227.54M | 149.19M | 159.25M | 131.00M | 109.25M |
| Cash, Cash Equivalents and Short-Term Investments | 17.16M | 20.14M | 17.87M | 17.54M | 26.86M | 31.28M |
| Total Debt | 67.90M | 73.16M | 15.95M | 29.68M | 14.04M | 14.45M |
| Total Liabilities | 130.97M | 134.62M | 63.92M | 81.17M | 67.86M | 58.20M |
| Stockholders Equity | 95.88M | 92.92M | 85.28M | 78.09M | 63.14M | 51.06M |
Cash Flow | ||||||
| Free Cash Flow | 24.55M | 22.10M | 20.16M | 6.11M | 3.56M | 2.45M |
| Operating Cash Flow | 30.39M | 27.69M | 26.61M | 12.27M | 8.77M | 6.66M |
| Investing Cash Flow | -69.57M | -69.68M | -6.45M | -35.33M | -6.15M | -4.89M |
| Financing Cash Flow | 37.36M | 44.27M | -19.82M | 16.45M | 1.84M | 601.00K |
Ooma Technical Analysis
Positive
15.71
Price Trends
18.00
Positive
15.81
Positive
13.72
Positive
Market Momentum
0.51
Negative
64.31
Neutral
85.89
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OOMA, the sentiment is Positive. The current price of 15.71 is below the 20-day moving average (MA) of 18.00, below the 50-day MA of 18.00, and above the 200-day MA of 13.72, indicating a bullish trend. The MACD of 0.51 indicates Negative momentum. The RSI at 64.31 is Neutral, neither overbought nor oversold. The STOCH value of 85.89 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OOMA.
Ooma Risk Analysis
Ooma disclosed 63 risk factors in its most recent earnings report. Ooma reported the most risks in the "Legal & Regulatory" 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $243.71M | 18.63 | 11.33% | ― | 15.77% | 40.61% | |
68 Neutral | $535.97M | 60.04 | 10.01% | ― | 11.70% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $381.60M | -28.10 | -1.96% | 4.63% | 1.29% | 57.21% | |
59 Neutral | $376.94M | 12.37 | 7.85% | ― | -1.15% | ― | |
56 Neutral | $749.61M | -15.80 | -5.04% | 0.97% | 4.44% | -19.31% | |
53 Neutral | $162.65M | -2.39 | 48.24% | ― | -0.93% | 47.84% |
* Technology Sector Average
OOMA
Ooma
19.80
6.78
52.07%
ATNI
ATN International
24.73
8.29
50.44%
RDCM
Radcom
14.16
0.57
4.19%
SHEN
Shenandoah Telecommunications Co
13.11
-1.16
-8.12%
RBBN
Ribbon Communications
2.21
-1.87
-45.83%
KORE
KORE Group Holdings
9.23
6.86
289.45%
Ooma Corporate Events
Executive/Board ChangesShareholder Meetings
Ooma Stockholders Approve Directors, Auditor and Executive Pay
Positive
Jun 9, 2026
At Ooma, Inc.’s annual meeting of stockholders held on June 4, 2026, approximately 85.2% of outstanding common shares were represented, establishing a quorum for voting on key governance matters. Stockholders elected Susan G. Butenhoff and R...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.