Are Smart Investors Making the Right Decision? Ooma Inc. (OOMA)

Ooma Inc. (NYSE: OOMA) stock jumped 9.84% on Friday to $13.51 against a previous-day closing price of $12.30. With 0.16 million shares changed hands, the volume of the stock remained heavier than its average volume of 89060.0 shares. During the session, the Telecom Services company that operates in wider Communication Services sector, reached to the highest price of $13.56 whereas the lowest price it dropped to was $12.51. The 52-week range on OOMA shows that it touched its highest point at $24.28 and its lowest point at $10.82 during that stretch. It currently has a 1-year price target of $22.10. Beta for the stock currently stands at 0.65.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of OOMA was up-trending over the past week, with a rise of 8.25%, but this was up by 15.97% over a month. Three-month performance surged to 12.68% while six-month performance fell -14.44%. The stock lost -29.01% in the past year, while it has lost -33.90% so far this year. A look at the trailing 12-month EPS for OOMA yields -0.04 with Next year EPS estimates of 0.56. For the next quarter, that number is 0.11. This implies an EPS growth rate of 31.70% for this year and 19.06% for next year. EPS is expected to grow by 47.70% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 36.80%.

Float and Shares Shorts:

At present, 24.39 million OOMA shares are outstanding with a float of 22.54 million shares on hand for trading. On Jul 14, 2022, short shares totaled 0.78 million, which was 3.23% higher than short shares on Jun 14, 2022. In addition to Mr. Eric B. Stang as the firm’s Pres, CEO & Chairman, Mr. Shigeyuki Hamamatsu serves as its VP, CFO & Treasurer.

Institutional Ownership:

Through their ownership of 84.16% of OOMA’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 58.41% of OOMA, in contrast to 22.64% held by mutual funds. Shares owned by individuals account for 12.23%. As the largest shareholder in OOMA with 10.53% of the stake, Trigran Investments, Inc. holds 2,559,130 shares worth 2,559,130. A second-largest stockholder of OOMA, BlackRock Fund Advisors, holds 1,498,680 shares, controlling over 6.17% of the firm’s shares. AWM Investment Co., Inc. is the third largest shareholder in OOMA, holding 1,409,948 shares or 5.80% stake. With a 2.76% stake in OOMA, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 671,112 shares are owned by the mutual fund manager. The iShares Russell 2000 ETF, which owns about 1.96% of OOMA stock, is the second-largest Mutual Fund holder. It holds 475,266 shares valued at 5.75 million. Royce Small-Cap Opportunity Fund holds 1.56% of the stake in OOMA, owning 377,878 shares worth 4.57 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for OOMA since 6 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 0 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With OOMA analysts setting a high price target of $27.50 and a low target of $19.00, the average target price over the next 12 months is $22.10. Based on these targets, OOMA could surge 103.55% to reach the target high and rise by 40.64% to reach the target low. Reaching the average price target will result in a growth of 63.58% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. OOMA will report FY 2023 earnings on 03/07/2023. Analysts have provided yearly estimates in a range of $0.49 being high and $0.45 being low. For OOMA, this leads to a yearly average estimate of $0.47. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Ooma Inc. surprised analysts by $0.02 when it reported $0.12 EPS against a consensus estimate of $0.10. The surprise factor in the prior quarter was $0.02. Based on analyst estimates, the high estimate for the next quarter is $0.12 and the low estimate is $0.11. The average estimate for the next quarter is thus $0.12.

Summary of Insider Activity:

Insiders traded OOMA stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 14 while that of sell transactions has risen to 23 over the past year. The total number of shares bought during that period was 366,617 while 77,098 shares were sold.

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