Ooma Shares Shoot Up As Analysts See Up To 52% Upside Post Q2 Beat

  • Ooma Inc OOMA reported Q2 revenue of $47.1 million, up 14% year-on-year, beating the analyst consensus of $46.3 million. The adjusted EPS of $0.13 beat the consensus of $0.08.
  • The smart communications platform sees Q3 revenue of $47.8 million - $48.5 million, above the consensus of $46.7 million. It considers an adjusted EPS of $0.08 - $0.11, above the consensus of $0.07.
  • Ooma roped in Accuray Inc's ARAY CFO Shig Hamamatsu, as its new Finance Chief effective September 7.
  • Hamamatsu succeeded the acting CFO Namrata Sabharwal.
  • Analysts raised their price targets following revenue growth momentum.
  • JMP Securities analyst Joe Goodwin raised the PT to $27 from $22, implying a 36.8% upside, and reiterated an Outperform. 
  • Goodwin noted that revenue growth accelerated as the business demonstrates solid momentum in its business subscription segment.
  • Benchmark analyst Matthew Harrigan raised the PT to $30 from $27, signifying a 52.1% upside, and maintained a Buy.
  • Continued momentum for Microsoft Corp MSFT Office Pro should maintain intermediate ARPU momentum, argues Harrigan, who now models a 5.2% ARPU CAGR through FY30 versus his prior roughly 4% estimate.
  • B. Riley analyst Josh Nichols raised the PT to $27.50 from $24, indicating a 39.4% upside, and affirmed a Buy. 
  • Nichols noted that Ooma's "higher-value" business revenue is on track to surpass 50% of subscription and services revenue by the end of the current fiscal year while maintaining a 5% EBITDA margin floor.
  • Price Action: OOMA shares traded higher by 12.87% at $22.27 on the last check Friday.
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