William Blair analyst Arjun Bhatia has maintained their bullish stance on OOMA stock, giving a Buy rating yesterday.
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Arjun Bhatia’s rating is based on Ooma’s strategic acquisition of FluentStream, which significantly enhances its market position. The acquisition is set to expand Ooma’s customer base by adding approximately 80,000 business users and 5,000 customers, thereby increasing its scale and deepening its penetration into the SMB market. This move is expected to contribute an additional $24 million to $25 million in revenue and $9.5 million to $10.5 million in adjusted EBITDA, which is acquired at a favorable EBITDA multiple compared to Ooma’s existing multiple.
Furthermore, FluentStream’s established channel and partner program is seen as a valuable asset that Ooma can leverage to accelerate its growth in the SMB segment. By integrating FluentStream’s capabilities with its own, Ooma aims to enhance its competitive positioning and reduce market competition. The acquisition allows Ooma to consolidate its market presence, potentially improving its pricing power and supporting its long-term growth strategy.
According to TipRanks, Bhatia is a 2-star analyst with an average return of 0.9% and a 42.69% success rate. Bhatia covers the Technology sector, focusing on stocks such as Atlassian, Sprout Social, and InterDigital.
In another report released yesterday, Lake Street also maintained a Buy rating on the stock with a $17.00 price target.