Why Ooma Stock Is Soaring Today
Key Points
Ooma reported strong first-quarter 2027 financial results.
Management forecasts year-over-year revenue and adjusted EPS growth in fiscal 2027.
Ooma shares are trading at a discount to their historical valuation.
Ooma (NYSE: OOMA) announced first-quarter 2027 financial results yesterday after the market closed, and it's clear that investors like what the advanced business communications provider reported. Hiking their price targets on Ooma stock today, analysts were also impressed.
As of 10:19 a.m. ET, shares of Ooma are up 3.7%, retreating from an earlier 13.4% rise.
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Beating analysts' estimates is only part of the story
Announcing Q1 2027 revenue of $81.1 million and adjusted earnings per share of $0.35, Ooma exceeded analysts' expectations that it would report revenue and adjusted EPS of $79.8 million and $0.32, respectively.
The company attributed the strong quarterly performance to several factors, including growth in AirDial sales, organic growth from Ooma Business, and the successful integration of the acquisitions of FluentStream and Phone.com.
Besides insights into the company's recent financial performance, management provided encouraging 2027 guidance: revenue of $326 million to $328.5 million and adjusted EPS of $1.29 to $1.34. For context, Ooma reported fiscal 2026 sales of $273.6 million and adjusted EPS of $1.04.
Following the company's strong start to fiscal 2027, several analysts raised their price targets on Ooma stock today. In addition to Lake Street, which raised its price target to $23 from $18, Alliance Global lifted its target to $23 from $17, while Benchmark nudged its target to $24 from $23.
Is now a good time to click the buy button on Ooma stock?
With the company turning in a solid performance to start its new fiscal year, it's unsurprising that investors are considering adding Ooma to their portfolios. And now would be a great time with the stock hanging on the discount rack. Shares are currently valued at 14.5 times operating cash flow, a discount to their five-year cash flow multiple of 15.2.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.