Domo Reports Smaller-than-Expected Quarterly Loss

Cloud-software company Domo, Inc. (DOMO) reported a smaller-than-expected loss in fiscal Q1 fueled by top-line growth. Shares rose 1.3% to close at $66.50 on May 28.

The company reported an adjusted loss of $0.26 per share, compared to the loss of $0.65 per share recorded in the prior-year quarter. Analysts had expected a loss of $0.43 per share.

Revenue for the quarter surged 24% year-over-year to $60.06 million, surpassing the Street’s estimates of $57.49 million.

Domo specializes in business intelligence tools and data visualization. (See Domo stock analysis on TipRanks)

Subscription revenue was up 23% year-over-year to $52.11 million, while billings for the quarter increased 25% to $58.24 million. Additionally, remaining performance obligations (RPO) stood at $284.3 million, up 24%.

Josh James, founder and CEO of the company said, “With a record Q1 across many metrics including new business and retention, our performance this quarter puts us in a great position to execute well for the remainder of FY22.”

In Q2, the company forecasts revenue and adjusted loss in the range of $60 million to $61 million and $0.35 – $0.39 per share, respectively. Consensus estimates for revenue and earnings are pegged at $59.74 million and ($0.43) per share, respectively.

For the Fiscal Year 2022, the company expects revenue to be in the range of $246 million – $252 million, and a loss of between $1.33 and $1.41 per share. Street estimates are for revenue of $246.03 million and a $1.54 loss per share.

Following the robust Q1 results, Needham analyst Jack Andrews lifted the price target on the stock to $93, up from $91 implying 39.9% upside potential to current levels.

While maintaining a Buy rating, Andrews said, “We believe Domo has created a unique platform levered to the future requirements of enterprise analytics (self-service and scalability) without the exorbitant costs of implementation. As management executes changes in its sales strategy, we believe Domo, which trades at an EV/revenue multiple discount, can close the relative valuation gap to its Big Data software peer group.”

Consensus among analysts is a Strong Buy based on 5 Buys and 1 Hold. The average analyst price target stands at $86.50 and implies upside potential of 30.1% to current levels. Shares have exploded 132.5% over the past year.

Domo scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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