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Ooma (OOMA)
NYSE:OOMA
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Ooma (OOMA) AI Stock Analysis

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OOMA

Ooma

(NYSE:OOMA)

Rating:56Neutral
Price Target:
$13.50
▲(7.48% Upside)
Ooma's overall score is driven by strong technical momentum and positive corporate events. However, financial performance and valuation concerns, particularly around profitability and a negative P/E ratio, weigh down the score.
Positive Factors
Earnings
Ooma's second-quarter results outperformed expectations, and the company reiterated full-year revenue guidance.
Market Expansion
The largest win to date in the form of a large national retailer with rollout anticipated across 3,000+ locations.
Strategic Partnerships
Comcast is the top cable MSO now reselling AirDial, indicating strong market acceptance and the potential for further growth.
Negative Factors
Sales Cycle
Sales cycles are lengthy and user migrations staged; management views 2026 as a build-out year with greater revenue contribution in 2027 as the solution set rounds out.
Valuation
Ooma shares trade at 1.9 times the calendar 2026 gross profit estimate, in line with the communications SaaS comp group median.

Ooma (OOMA) vs. SPDR S&P 500 ETF (SPY)

Ooma Business Overview & Revenue Model

Company DescriptionOoma, Inc. provides communications services and related technologies for businesses and consumers in the United States and Canada. The company's products and services include Ooma Office, a cloud-based multi-user communications system for small and medium-sized businesses; Ooma Office Pro that offers services, including HD video meetings, call recording, enhanced call blocking, and voicemail transcription; Ooma Connect, which delivers fixed wireless internet connectivity; Ooma Managed Wi-Fi, a plug-and-play enterprise-grade Wi-Fi solution; and Ooma Enterprise, a unified-communications-as-a-service solution. It also provides Ooma AirDial, a plain old telephone service; Ooma Telo basic that provides unlimited personal calling within the Unites States; Ooma Premier, a suite of advanced calling features on a monthly or annual subscription basis; PureVoice HD, a residential phone services; Ooma Telo, a home communications solution designed to serve as the primary phone line in the home; and Ooma Telo 4G, which combines the Ooma Telo base station with the Ooma 4G Cellular Adapter and battery back-up. In addition, the company offers Ooma Mobile HD app that allows users to make and receive phone calls and access Ooma features and settings; Ooma Telo Air, a wireless Ooma Telo with built-in Wi-Fi and Bluetooth; Ooma Smart Security, a security and monitoring platform; and Talkatone mobile app. It offers its products through direct sales, distributors, retailers, and resellers, as well as online. Ooma, Inc. was incorporated in 2003 and is headquartered in Sunnyvale, California.
How the Company Makes MoneyOoma generates revenue primarily through subscription-based services, including monthly and annual fees for its residential and business VoIP plans. The company offers various tiers of service with different features, allowing it to capture a wide range of customers from individual consumers to small businesses. Additional revenue streams include the sale of hardware products, such as the Ooma Telo device and accessories. Ooma also benefits from partnerships with other technology providers and telecommunications companies, which helps to expand its customer base and enhance its service offerings. Furthermore, Ooma generates revenue through optional add-on services like international calling and advanced features, contributing to its overall earnings.

Ooma Earnings Call Summary

Earnings Call Date:Aug 26, 2025
(Q2-2026)
|
% Change Since: |
Next Earnings Date:Nov 27, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance with record-setting revenue and profitability. Airdial showed significant growth potential with major customer wins and expanded reseller partnerships, contributing to a positive outlook. Despite a slight decline in residential subscription revenue and flat gross margins, the overall sentiment remains positive due to robust business segment growth and financial health.
Q2-2026 Updates
Positive Updates
Record Financial Performance
Ooma reported strong Q2 financial results with revenue growing to $66.4 million. They achieved record non-GAAP net income of $500,000 and record adjusted EBITDA of $7.2 million, marking an 11% adjusted EBITDA as a percent of revenue.
Airdial Progress and Expansion
Airdial bookings more than doubled year over year. Ooma secured its largest customer win to date with a large national retailer, expecting to serve over 3,000 locations. They also expanded the number of Airdial partner resellers to 35.
Business User Growth
Business subscription and services revenue grew 66% year over year in Q2. Ooma saw an increased take rate for its Pro and Pro Plus offerings and grew its business user base by 9,000 compared to Q1.
Strong Cash Flow and Share Buyback
Ooma generated $6.4 million in operating cash flow and $5 million in free cash flow for Q2. They also spent $4.5 million on share buybacks in Q2.
Negative Updates
Decline in Residential Subscription Revenue
Residential subscription and services revenue decreased by 2% year over year.
Flat Overall Gross Margin
Total gross margin for Q2 was 62%, unchanged from the prior year, due to a heavier mix of product revenue offsetting improvements in product gross margin.
Company Guidance
During the call, Ooma, Inc. provided guidance for the third quarter and full fiscal year 2026 on a non-GAAP basis. For the third quarter, the company anticipates total revenue between $67.2 million and $67.9 million, with non-GAAP net income ranging from $6 million to $6.4 million. The non-GAAP diluted EPS is expected to be between $0.22 to $0.23, based on an assumption of 27.9 million weighted average diluted shares outstanding. For the full fiscal year 2026, Ooma forecasts total revenue to be within $267 million to $270 million, with business subscription and services revenue growth of 5% to 6% over fiscal 2025, while residential subscription revenue is projected to decline by 1% to 2%. The non-GAAP net income guidance for the year is raised to a range of $24.5 million to $25 million, with an adjusted EBITDA expected between $28.5 million and $29 million. The company assumes approximately 28.2 million weighted average diluted shares outstanding for fiscal 2026, with expected non-GAAP diluted EPS ranging from $0.87 to $0.89.

Ooma Financial Statement Overview

Summary
Ooma shows solid revenue growth and strong gross margins, but faces profitability challenges with negative net and EBIT margins. The balance sheet is stable with low leverage, and cash flow performance is strong, highlighted by significant free cash flow growth.
Income Statement
70
Positive
Ooma demonstrates consistent revenue growth with a TTM growth rate of 9.5% compared to the previous year. The gross profit margin stands strong at 60.9% for TTM, indicating efficient cost management. However, the company is facing challenges with profitability as reflected in the negative net profit margin of -1.9% and negative EBIT margin of -1.6%. Despite these challenges, the EBITDA margin of 3.3% suggests potential for operational improvements.
Balance Sheet
65
Positive
The balance sheet displays a healthy equity ratio of 59.0% and a manageable debt-to-equity ratio of 0.18, indicating financial stability. Nonetheless, the return on equity is negative, at -5.6%, due to the net losses, pointing towards inefficiencies in generating returns for shareholders.
Cash Flow
78
Positive
Ooma's cash flow is robust, highlighted by a significant free cash flow growth rate of 235.5% from 2024 to 2025. The operating cash flow to net income ratio is strong at -5.5, indicating effective cash generation despite reported net losses. The free cash flow to net income ratio is -4.2, suggesting that the company is generating adequate cash relative to its net income.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue261.62M256.85M236.74M216.16M192.29M168.95M
Gross Profit159.64M156.02M147.23M137.65M118.44M104.80M
EBITDA11.43M6.20M8.18M3.28M5.43M4.60M
Net Income-1.51M-6.90M-835.00K-3.65M-1.57M-2.44M
Balance Sheet
Total Assets150.09M149.19M159.25M131.00M109.25M89.10M
Cash, Cash Equivalents and Short-Term Investments19.56M17.87M17.54M26.86M31.28M28.31M
Total Debt11.59M15.95M29.68M14.04M14.45M2.81M
Total Liabilities61.97M63.92M81.17M67.86M58.20M49.55M
Stockholders Equity88.12M85.28M78.09M63.14M51.06M39.55M
Cash Flow
Free Cash Flow20.21M20.16M6.11M3.56M2.45M1.21M
Operating Cash Flow26.00M26.61M12.27M8.77M6.66M4.37M
Investing Cash Flow-5.79M-6.45M-35.33M-6.15M-4.89M229.00K
Financing Cash Flow-17.23M-19.82M16.45M1.84M601.00K1.02M

Ooma Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price12.56
Price Trends
50DMA
12.11
Positive
100DMA
12.45
Positive
200DMA
13.29
Negative
Market Momentum
MACD
0.29
Negative
RSI
55.96
Neutral
STOCH
62.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OOMA, the sentiment is Neutral. The current price of 12.56 is above the 20-day moving average (MA) of 12.05, above the 50-day MA of 12.11, and below the 200-day MA of 13.29, indicating a neutral trend. The MACD of 0.29 indicates Negative momentum. The RSI at 55.96 is Neutral, neither overbought nor oversold. The STOCH value of 62.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$219.84M24.199.74%18.18%89.73%
61
Neutral
$35.55B8.88-11.02%1.87%8.55%-8.14%
61
Neutral
$808.15M-5.17%10.20%
60
Neutral
$440.85M-30.99%-8.67%63.35%
59
Neutral
$706.56M-11.45%7.68%18.65%
56
Neutral
$346.66M-1.78%5.42%69.88%
52
Neutral
$245.19M-9.15%6.19%-5.33%-334.05%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OOMA
Ooma
12.56
1.86
17.38%
ATNI
ATN International
16.07
-9.83
-37.95%
RDCM
Radcom
13.72
4.11
42.77%
SIFY
Sify Technologies
11.17
8.65
343.25%
RBBN
Ribbon Communications
3.99
1.13
39.51%
WOW
Wideopenwest
5.14
-0.41
-7.39%

Ooma Corporate Events

Shareholder Meetings
Ooma Approves Amendments to Equity Plans
Neutral
Jun 10, 2025

At the 2025 Annual Meeting of Stockholders held on June 5, 2025, Ooma, Inc. announced the approval of amendments to its 2015 Equity Incentive Plan and 2015 Employee Stock Purchase Plan. These amendments increase the number of shares authorized for issuance by 330,000 and 795,144 shares, respectively, potentially enhancing the company’s ability to attract and retain talent through equity compensation.

Executive/Board ChangesShareholder Meetings
Ooma Stockholders Approve Key Proposals at Annual Meeting
Positive
Jun 9, 2025

At the annual meeting held on June 5, 2025, Ooma, Inc. stockholders voted on five key proposals. These included the election of directors, ratification of KPMG LLP as the independent accounting firm, approval of executive compensation, and amendments to the company’s equity incentive and employee stock purchase plans. The approval of these proposals ensures continuity in leadership and financial oversight, while also extending the company’s incentive plans, which are crucial for employee retention and motivation.

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.Date of analysis: Aug 29, 2025