Shares of cloud software company Domo Inc. (DOMO) have gained 100.3% over the past 12 months. In the second quarter of Fiscal Year 2022, it outperformed analysts’ estimates on both top-line and bottom-line fronts. Let’s take a look at Domo’s latest second-quarter results and understand what has changed in its key risk factors that investors should know.
Domo witnessed robust growth in subscription revenue, which made up 87% of the total revenues and helped its top-line increase 23% year-over-year to $62.8 million. This figure was better than the Street’s expectations by $1.96 million.
The non-GAAP operating margin of the company expanded 6% during this period. Net loss per share of $0.30 was narrower than analysts’ estimates by $0.06. Domo had posted a net loss per share of $0.37 in the same quarter last year. (See Domo stock chart on TipRanks)
The Founder and CEO of Domo, Josh James, said, “We have seen the demand for modern BI continue as companies look to unlock and democratize data for every person and every action that moves their business forward.”
Looking ahead, for full fiscal 2022, Domo expects its revenues to land between $252 million and $256 million. It estimates net loss per share in the range of $1.31 and $1.39.
On August 27, Cowen & Co. analyst Derrick Wood reiterated a Buy rating on the stock and increased the price target to $110 from $100. Wood noted the stock might take “a breather near term”, but is favorably set up for Q4 and into CY22.
Based on 5 unanimous Buys, consensus on the Street is a Strong Buy for Domo. The average Domo price target of $106.25 implies 36.8% upside potential.
Now, let’s look at what’s changed in the company’s key risk factors.
According to the new Tipranks’ Risk Factors tool, Domo’s main risk category is Finance & Corporate, which accounts for 33% of the total 61 risks identified. Since July, the company has changed one key risk factor under the Macro & Political risk category.
Domo highlights that the current COVID-19 global pandemic may have an impact on its business and operating results in ways that are volatile and unpredictable. This impact may depend on uncertain future developments such as duration and potential future waves of the pandemic, government, business, individual actions in response to the pandemic, and the availability and effectiveness of COVID-19 vaccines.
These factors may lead to economic, social, or labor instability in geographies and industries where Domo or its customers operate. The company’s platform is offered as a subscription-based service and the impact from COVID-19 may not get fully reflected in Domo’s results until future periods, if at all.
The Finance & Corporate risk factor’s sector average is at 38%, compared to Domo’s 33%.
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