GICS Sector : Communication Services
Ooma, Inc.provides communications services and related technologies for businesses and consumers in the United States and Canada.The company's products and services include Ooma Office, a cloud-based multi-user communications system for small and medium-sized businesses; Ooma Office Pro that offers services, including HD video meetings, call recording, enhanced call blocking, and voicemail transcription; Ooma Connect, which delivers fixed wireless internet connectivity; Ooma Managed Wi-Fi, a plug-and-play enterprise-grade Wi-Fi solution; and Ooma Enterprise, a unified-communications-as-a-service solution.
Ooma reported a robust Q3 with revenue reaching $67.6 million, up 4% year over year, driven by the growth of its business segment, including AirDial. The company's non-GAAP net income was $7.7 million, significantly above the guidance range and representing a 68% year-over-year growth. Earnings per share (EPS) came in at $0.27, beating estimates of $0.22. The adjusted EBITDA margin improved to 13%, with a record adjusted EBITDA of $8.6 million, marking a 50% year-over-year growth.
Publication Date: Dec -20
Ooma's business solutions, including Ooma Office and Ooma Enterprise, added new customers in line with expectations. The company made significant progress in expanding sales and increasing awareness of AirDial, adding nine new resale partners in Q3. The long-term goal remains to secure 300,000 AirDial lines, generating $100 million of AirDial annual recurring revenue.
Ooma completed the acquisition of FluentStream and is expected to close the acquisition of phone.com by the end of the month. These acquisitions are anticipated to add over 165,000 users, $45 million of revenue, and $10 million of adjusted EBITDA to Ooma annually before synergies. Eric Stang noted that the closer the acquisition is to their existing business, the easier it is to understand and leverage, driving strong growth and better economics overall.
With a P/E Ratio of 142.43 and an EV/EBITDA of 54.54, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 5.2%. Ooma's guidance for the fourth quarter expects total revenue to be in the range of $71.3 million to $71.9 million, including a $4 to $4.1 million revenue contribution from FluentStream. The company's focus on executing well, capturing opportunities, and driving improved top and bottom-line results is expected to propel the business towards becoming a bigger, stronger, and more profitable entity.
The company is seeing traction in its Ooma Enterprise platform, with a significant win in Las Vegas and plans to add more than 50 hotels every quarter. Ooma is also leveraging AI developments to drive productivity and offer clear value to small businesses. The integration of FluentStream and phone.com is expected to be straightforward, without disrupting Ooma's existing operations.
Wall Street Analysts Predict a 56.16% Upside in Ooma (OOMA): Here's What You Should Know
Jan -16
Ooma to Virtually Host Investor Meetings via the 28th Annual Needham Growth Conference on January 15
Jan -06
Wall Street Analysts See a 60.47% Upside in Ooma (OOMA): Can the Stock Really Move This High?
Dec -31
Ooma Completes Acquisition of Phone.com
Dec -29
Head to Head Review: Altice USA (NYSE:ATUS) and Ooma (NYSE:OOMA)
Dec -17
Ooma: Margin Expansion And EPS Growth Make The Risk Worth It
Dec -15
Wall Street Analysts Think Ooma (OOMA) Could Surge 56.82%: Read This Before Placing a Bet
Dec -15
AWM Investment Company Inc. Has $9.45 Million Stake in Ooma, Inc. $OOMA
Dec -13
Ooma's 9% growth in Subscription and Services is driven by increasing adoption of its VoIP phone services, expansion into new markets, and growing demand for smart home security solutions. Additionally, the company's focus on innovation, customer retention, and strategic partnerships contribute to its sustained growth.
Ooma's 7% growth in Product and Other segments is driven by increasing adoption of its smart home security solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, such as the introduction of new devices and features, has contributed to the growth. Furthermore, the shift towards subscription-based services has provided a stable revenue stream, supporting the company's overall growth.
A business phone system designed for small businesses, offering advanced features such as video conferencing, call recording, and virtual receptionist.
A VoIP phone system for home users, providing crystal-clear voice quality, low-cost international calling, and advanced features like 911 text alerts.
A wireless phone system that connects to the internet via Wi-Fi or Ethernet, offering a reliable and portable phone solution.
A comprehensive home security system that integrates with Ooma's phone service, offering features like motion detection, video recording, and alerts.
A 911 emergency response system that provides location-specific emergency services, ensuring timely and accurate emergency responses.
Ooma, Inc. faces moderate threat from substitutes due to the presence of traditional phone services and other VoIP providers. However, Ooma's unique features and competitive pricing help to mitigate this threat.
Ooma, Inc. has a low bargaining power of customers due to its strong brand reputation and customer loyalty. Customers have limited bargaining power, and Ooma's pricing strategy is competitive.
Ooma, Inc. has a low bargaining power of suppliers due to its diversified supply chain and lack of dependence on a single supplier. This reduces the risk of supplier negotiations and price increases.
Ooma, Inc. faces a high threat of new entrants due to the relatively low barriers to entry in the VoIP industry. New entrants can easily enter the market, posing a threat to Ooma's market share.
Ooma, Inc. operates in a moderately competitive industry, with several established players. While there is some rivalry, Ooma's unique features and competitive pricing help to differentiate it from competitors.
| Value | |
|---|---|
| Debt Weight | 20.18% |
| Debt Cost | 8.19% |
| Equity Weight | 79.82% |
| Equity Cost | 8.19% |
| WACC | 8.19% |
| Leverage | 25.28% |
Value: 3.4
Growth: 7.3
Quality: 3.2
Yield: 0.0
Momentum: 10.0
Volatility: 2.0
1-Year Total Return ->
Value: 7.8
Growth: 2.1
Quality: 3.9
Yield: 3.0
Momentum: 7.0
Volatility: 1.3
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Value: 6.0
Growth: 4.9
Quality: 8.8
Yield: 0.0
Momentum: 1.0
Volatility: 4.0
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Value: 2.7
Growth: 5.9
Quality: 5.6
Yield: 0.0
Momentum: 2.5
Volatility: 5.3
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Value: 9.5
Growth: 1.9
Quality: 4.2
Yield: 0.0
Momentum: 2.5
Volatility: 2.3
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Value: 3.4
Growth: 2.9
Quality: 4.0
Yield: 0.0
Momentum: 4.0
Volatility: 2.0
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