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Ooma (OOMA)
NYSE:OOMA
US Market

Ooma (OOMA) AI Stock Analysis

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Ooma

(NYSE:OOMA)

Rating:66Neutral
Price Target:
$14.00
▲(7.61%Upside)
Ooma's overall stock score is influenced most significantly by its financial performance, which shows strong revenue growth and cash flow but is hindered by profitability challenges. While technical indicators suggest a lack of strong momentum, positive earnings call sentiment and recent corporate events contribute favorably. Valuation remains a concern with a negative P/E ratio and no dividend yield, reflecting potential overvaluation.
Positive Factors
Market Opportunity
A notable early 2025 client event was Marriott Hotels and Resorts extending brand certification to AirDial as its only approved POTS replacement solution, representing a significant growth opportunity for Ooma.
Product Recognition
Ooma's Office product has received recognition by winning the PCMag 2025 Business Choice Award for VoIP Service, highlighting its appeal and quality.
Strategic Partnerships
Comcast is the top cable MSO now reselling AirDial, indicating strong market acceptance and the potential for further growth.
Negative Factors
Client Base
1Q26 sales were up 4% to $65.0M, in line with guidance and Benchmark’s estimate with a mild dampener as expected from seat reductions at Regus, Ooma’s largest client.
Stock Performance
The stock has fallen 8% year to date versus a 5% drop for the Russell 3000.

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 its subscription-based model, offering communication services to both residential and business customers. For residential users, Ooma provides VoIP phone services which typically include the sale of hardware devices like the Ooma Telo, followed by ongoing service subscriptions. For business customers, Ooma offers a suite of business phone services, including Ooma Office, which charges a monthly fee per user for access to its cloud-based phone system. Additionally, Ooma earns from smart security products and managed service offerings. The company may also enter into partnerships with retailers and service providers to expand its market reach and enhance its distribution channels, contributing to its revenue streams.

Ooma Earnings Call Summary

Earnings Call Date:May 28, 2025
(Q1-2026)
|
% Change Since: -2.84%|
Next Earnings Date:Sep 02, 2025
Earnings Call Sentiment Positive
The earnings call for Ooma, Inc. highlighted a strong start to fiscal 2026 with impressive revenue growth and profitability, particularly in the Airdial and 2600 Hertz segments. However, challenges such as core user decline and residential subscription revenue decrease were noted. Despite these lowlights, the overall sentiment remains positive due to significant achievements and growth potential.
Q1-2026 Updates
Positive Updates
Strong Start to Fiscal Year 2026
Ooma, Inc. reported $65 million in revenue, $5.6 million in non-GAAP net income, and $6.7 million in adjusted EBITDA, exceeding the top end of their guidance range.
Revenue Growth and Profitability
Revenue grew by 4% year over year, with significant contributions from Ooma Office and Ooma Enterprise. The company achieved a 56% increase in non-GAAP net income compared to the prior year quarter.
Ooma Airdial Expansion
Partnership with Comcast launched on schedule, and the company signed up several new Airdial reseller partners, now exceeding 30 partners.
2600 Hertz Platform Success
Closed four new customers in Q1, validating the platform's capability to win CPaaS type opportunities.
Improved Product Gross Margin
Product and other gross margin improved from negative 67% to negative 41% year over year.
Negative Updates
Decline in Core Users
The total number of core users declined from 1,234,000 to 1,225,000, primarily due to seat reductions with IWG.
Residential Subscription Revenue Decline
Residential subscription and services revenue decreased by 2% year over year.
Continued Tariff Impact
Tariffs are expected to impact fiscal 2026 with an estimated cost of approximately $500,000.
Company Guidance
During the first quarter fiscal year 2026 earnings call, Ooma, Inc. reported several key financial metrics and provided guidance for the upcoming periods. The company achieved $65 million in revenue, a year-over-year growth of 4%, and $5.6 million in non-GAAP net income. Their adjusted EBITDA was $6.7 million, which exceeded the top end of their guidance range. Business subscription and services revenue accounted for 62% of total revenue, growing 6% year over year, while the residential subscription and services revenue declined by 2%. The company ended the quarter with 1,225,000 core users and a blended average monthly subscription revenue per core user of $15.37. For the second quarter, revenue is expected to range from $65.5 million to $66.1 million, with a non-GAAP net income forecasted between $5.6 million and $5.9 million. For the full fiscal year 2026, Ooma reaffirmed its revenue guidance of $267 million to $270 million, with non-GAAP net income projected to be between $22.5 million and $23.5 million.

Ooma Financial Statement Overview

Summary
Ooma shows strong revenue growth and efficient cost management with a gross profit margin of 60.9%. However, it struggles with profitability, reflected in negative net and EBIT margins. Despite these challenges, its cash flow is robust with significant free cash flow growth, indicating potential for operational improvements.
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.
BreakdownTTMMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue259.38M256.85M236.74M216.16M192.29M168.95M
Gross Profit158.11M156.02M147.23M137.65M118.44M104.80M
EBITDA8.68M6.99M8.18M3.28M5.43M4.60M
Net Income-4.90M-6.90M-835.00K-3.65M-1.57M-2.44M
Balance Sheet
Total Assets148.77M149.19M159.25M131.00M109.25M89.10M
Cash, Cash Equivalents and Short-Term Investments18.99M17.87M17.54M26.86M31.28M28.31M
Total Debt15.60M15.95M29.68M14.04M14.45M2.81M
Total Liabilities61.06M63.92M81.17M67.86M58.20M49.55M
Stockholders Equity87.71M85.28M78.09M63.14M51.06M39.55M
Cash Flow
Free Cash Flow20.50M20.16M6.11M3.56M2.45M1.21M
Operating Cash Flow26.72M26.61M12.27M8.77M6.66M4.37M
Investing Cash Flow-6.22M-6.45M-35.33M-6.15M-4.89M229.00K
Financing Cash Flow-17.36M-19.82M16.45M1.84M601.00K1.02M

Ooma Technical Analysis

Technical Analysis Sentiment
Positive
Last Price13.01
Price Trends
50DMA
12.85
Positive
100DMA
13.24
Negative
200DMA
13.27
Negative
Market Momentum
MACD
-0.05
Negative
RSI
54.14
Neutral
STOCH
79.69
Neutral
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 13.01 is above the 20-day moving average (MA) of 12.71, above the 50-day MA of 12.85, and below the 200-day MA of 13.27, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 54.14 is Neutral, neither overbought nor oversold. The STOCH value of 79.69 is Neutral, 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

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$217.68M25.729.35%18.23%81.31%
66
Neutral
$359.08M-5.81%7.01%-84.41%
66
Neutral
¥376.80B13.682.32%2.50%5.41%-19.08%
65
Neutral
$261.42M-5.79%6.40%-5.46%-76.33%
57
Neutral
$730.89M-12.42%1.91%15.71%
56
Neutral
$346.56M-5.17%9.62%
WOWOW
46
Neutral
$351.31M-26.19%-8.37%78.45%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OOMA
Ooma
13.01
4.09
45.85%
ATNI
ATN International
17.18
-2.90
-14.44%
RDCM
Radcom
13.58
4.21
44.93%
SIFY
Sify Technologies
4.79
2.20
84.94%
RBBN
Ribbon Communications
4.14
0.88
26.99%
WOW
Wideopenwest
4.11
-1.06
-20.50%

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.

The most recent analyst rating on (OOMA) stock is a Buy with a $15.00 price target. To see the full list of analyst forecasts on Ooma stock, see the OOMA Stock Forecast page.

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.

The most recent analyst rating on (OOMA) stock is a Buy with a $15.00 price target. To see the full list of analyst forecasts on Ooma stock, see the OOMA Stock Forecast page.

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: Jul 01, 2025