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Ooma
(NYSE:OOMA)
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Rating:73Outperform
Price Target:
$26.00
▲(26.27% Upside)
Action:Reiterated
Date:08/28/26
The score is driven primarily by strengthening financial performance (profitability inflection and strong free cash flow) and a constructive earnings outlook with improving margins and growth catalysts. Technicals support a positive trend, but the overall score is held back by a relatively high P/E and execution risks noted on the call (AI adoption visibility and negative product gross margins).
Positive Factors
Business Subscription Growth
Strong growth in recurring business subscriptions increases revenue visibility and shifts the mix toward higher-value commercial customers. This can support durable scale benefits as Ooma expands its cloud communications footprint and cross-sells additional services.
Negative Factors
Thin Overall Profit Margins
Despite improved profitability, thin bottom-line margins leave earnings sensitive to cost inflation, integration expenses, and demand changes. Negative hardware margins can also dilute the economics of customer acquisition unless subscription revenue eventually offsets the upfront product losses.
Read all positive and negative factors
Positive Factors
Negative Factors
Business Subscription Growth
Strong growth in recurring business subscriptions increases revenue visibility and shifts the mix toward higher-value commercial customers. This can support durable scale benefits as Ooma expands its cloud communications footprint and cross-sells additional services.
Read all positive factors
Ooma (OOMA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$638.00M
Dividend YieldN/A
Average Volume (3M)446.91K
Price to Earnings (P/E)58.8
Beta (1Y)0.80
Revenue Growth17.19%
EPS GrowthN/A
CountryUS
Employees1,420
SectorTechnology
Sector Strength88
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.39
Shares Outstanding27,500,000
10 Day Avg. Volume571,922
30 Day Avg. Volume446,913
Financial Highlights & Ratios
PEG Ratio-0.27
Price to Book (P/B)3.48
Price to Sales (P/S)1.18
P/FCF Ratio14.65
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$26.33Price Target Upside27.89% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.31
Revenue Forecast (FY)$327.47M
Ooma Business Overview & Revenue Model
Company Description
Ooma, Inc. delivers a diverse range of communication solutions and associated technological innovations to both commercial clients and individual users across the United States and Canada. For businesses, Ooma offers an array of solutions. These i...
How the Company Makes Money
Ooma primarily makes money by selling subscription-based communications services and related add-ons. A major portion of revenue is generated from recurring service fees paid by business customers for cloud phone/UC subscriptions, typically priced...
Ooma Earnings Call Summary
Earnings Call Date:Aug 26, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Nov 26, 2026
Earnings Call Sentiment Positive
The call conveyed strong top-line growth, substantial margin and profitability improvement, robust cash generation, and clear strategic catalysts (AirDial expansion, AI product roadmap, MyPhone/StarDial and acquisition synergies). Key near-term uncertainties include limited visibility on AI adoption, negative product gross margins (though improving), modest core user growth with one-time churn impacts, and relatively low cash balances alongside outstanding debt. On balance, the positive operational and financial momentum and constructive guidance outweigh the highlighted challenges.Positive Updates
Strong Revenue Growth
Q2 revenue of $83.2M, up 25% year-over-year (from $66.4M). Full year fiscal '27 revenue guidance of $332M–$333.5M implying ~32% growth in business subscription and services year-over-year.
Negative Updates
Product & Other Gross Margin Still Negative
Product and other gross margin was negative 25% in Q2 (improved from negative 47% prior year), but excluding tariff recovery the margin was ~negative 30%, indicating product hardware/installation still compresses margins.
Read all updates
Q2-2027 Updates
Positive
Negative
Strong Revenue Growth
Q2 revenue of $83.2M, up 25% year-over-year (from $66.4M). Full year fiscal '27 revenue guidance of $332M–$333.5M implying ~32% growth in business subscription and services year-over-year.
Read all positive updates
Company Guidance
Ooma gave non‑GAAP guidance for Q3 and full‑year FY2027: for Q3 it expects total revenue of $83.7M–$84.5M (including $7.0M–$7.5M of product & other revenue), non‑GAAP net income of $9.8M–$10.2M and non‑GAAP diluted EPS of $0.34–$0.35 (assuming ~29.1M weighted average diluted shares). For full‑year FY27 the company forecasts revenue of $332.0M–$333.5M (business subscription & services revenue growth of ~32% YoY; residential subscription revenue flat to +1%), subscription & services to represent 91%–92% of revenue, non‑GAAP net income of $39.5M–$40.3M, adjusted EBITDA of $47.5M–$48.3M, and non‑GAAP diluted EPS of $1.35–$1.38 (assuming ~29.2M diluted shares); guidance is on a non‑GAAP basis (excluding items like stock‑based compensation and amortization).Ooma Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
78
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 306.59M | 273.60M | 256.85M | 236.74M | 216.16M | 192.29M |
| Gross Profit | 188.46M | 167.24M | 156.02M | 147.23M | 137.65M | 118.44M |
| EBITDA | 29.23M | 18.58M | 6.20M | 6.99M | 3.28M | 5.43M |
| Net Income | 10.93M | 6.46M | -6.90M | -835.00K | -3.65M | -1.75M |
Balance Sheet | ||||||
| Total Assets | 226.42M | 227.54M | 149.19M | 159.25M | 131.00M | 109.25M |
| Cash, Cash Equivalents and Short-Term Investments | 17.53M | 20.14M | 17.87M | 17.54M | 26.86M | 31.28M |
| Total Debt | 56.39M | 73.16M | 15.95M | 29.68M | 14.04M | 14.45M |
| Total Liabilities | 128.04M | 134.62M | 63.92M | 81.17M | 67.86M | 58.20M |
| Stockholders Equity | 98.39M | 92.92M | 85.28M | 78.09M | 63.14M | 51.06M |
Cash Flow | ||||||
| Free Cash Flow | 30.30M | 22.10M | 20.16M | 6.11M | 3.56M | 2.45M |
| Operating Cash Flow | 37.12M | 27.69M | 26.61M | 12.27M | 8.77M | 6.66M |
| Investing Cash Flow | -70.47M | -69.68M | -6.45M | -35.33M | -6.15M | -4.89M |
| Financing Cash Flow | 31.33M | 44.27M | -19.82M | 16.45M | 1.84M | 601.00K |
Ooma Technical Analysis
Positive
20.59
Price Trends
20.92
Positive
19.23
Positive
15.79
Positive
Market Momentum
0.62
Negative
60.46
Neutral
49.06
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 20.59 is below the 20-day moving average (MA) of 21.49, below the 50-day MA of 20.92, and above the 200-day MA of 15.79, indicating a bullish trend. The MACD of 0.62 indicates Negative momentum. The RSI at 60.46 is Neutral, neither overbought nor oversold. The STOCH value of 49.06 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $167.89M | 23.88 | 6.17% | ― | 1.89% | -26.43% | |
73 Outperform | $638.00M | 58.84 | 11.59% | ― | 17.19% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $476.43M | 2.96 | 34.33% | 3.60% | 2.02% | ― | |
51 Neutral | $355.86M | 21.77 | 3.85% | ― | -7.62% | ― | |
47 Neutral | $697.04M | -15.54 | -4.77% | 0.87% | 5.01% | -23.53% |
* Technology Sector Average
OOMA
Ooma
23.20
10.33
80.26%
ATNI
ATN International
30.93
15.48
100.21%
RDCM
Radcom
10.03
-4.22
-29.61%
SHEN
Shenandoah Telecommunications Co
12.59
-0.91
-6.71%
RBBN
Ribbon Communications
1.99
-2.07
-50.99%
Ooma Corporate Events
Executive/Board ChangesShareholder Meetings
Ooma Stockholders Approve Directors, Auditor and Executive Pay
Positive
Jun 9, 2026
At Ooma, Inc.’s annual meeting of stockholders held on June 4, 2026, approximately 85.2% of outstanding common shares were represented, establishing a quorum for voting on key governance matters. Stockholders elected Susan G. Butenhoff and R...
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.