Benchmark maintains Ooma stock Buy rating, $20 target post-results

Thursday’s trading session saw Ooma Inc . (NYSE: NYSE:OOMA) shares maintain a steady course at $13.23 as Benchmark analyst Matthew Harrigan reiterated a Buy rating and a $20.00 price target on the company. The affirmation came after Ooma’s recent financial results, which were announced after the market closed on Wednesday, surpassed expectations. According to InvestingPro, analysts maintain a Strong Buy consensus with price targets ranging from $17 to $20.

Ooma’s latest financial disclosure revealed non-GAAP net income and EBITDA that slightly exceeded the upper range of the company’s guidance. With revenue growth of 8.5% and a healthy gross margin of 60.74%, the company continues to show strong operational execution. The positive earnings were accompanied by promising remarks during the earnings call, particularly regarding Ooma’s AirDial product. A significant development highlighted was the confirmation that Comcast (NASDAQ:CMCSA), a major cable MSO, has begun reselling AirDial, a move that reflects the cable industry’s tendency to adopt and share innovative products.

The analyst’s note underscored the growing adoption of AirDial, with Ooma achieving its highest ever number of new resellers and supporters, with the count now exceeding 30. The market potential for AirDial is underscored by the need to transition more than 20 million North American POTS lines to avoid rising costs, mitigate safety liabilities, and minimize business disruptions.

In light of the recent results and market opportunities, Benchmark has slightly increased its fiscal year 2030 Adjusted EBITDA margin forecast for Ooma to just over 19%, from the previous 18%. This adjustment is still conservative compared to Ooma management’s long-term margin goal of 20-25%.

The continued endorsement from Benchmark reflects confidence in Ooma’s growth trajectory and its ability to capitalize on the substantial market opportunity presented by the ongoing modernization of traditional telephony infrastructure. The company’s performance and strategic partnerships appear to position it well for future expansion within the telecommunications sector. InvestingPro analysis suggests the stock is currently undervalued, with additional ProTips highlighting net income growth expectations and strong analyst support. Discover more insights and access the comprehensive Pro Research Report, along with 6 additional ProTips, by subscribing to InvestingPro.

In other recent news, Ooma Inc. announced its financial results for the first quarter of fiscal 2026, reporting an earnings per share (EPS) of $0.20, which surpassed the analysts’ forecast of $0.18. However, the company experienced a slight shortfall in revenue, achieving $65 million compared to the anticipated $65.6 million. Despite this revenue miss, Ooma saw strong growth in non-GAAP net income and adjusted EBITDA, increasing by 56% and 33% year-over-year, respectively. The company also provided optimistic full-year revenue guidance, projecting between $267 million and $270 million.

Additionally, Ooma continues to expand its business partnerships, recently launching Ooma AirDial with Comcast, which marks a significant step in its reseller partnership strategy. The company has also increased its number of AirDial reseller partners to over 30. Analysts from firms such as William Blair and Alliance Global Partners (NYSE:GLP) have noted the accelerating demand for Ooma’s AirDial service. Furthermore, Ooma’s business subscription and services revenue accounted for 62% of total subscription and services revenue, showcasing a positive trend in business service adoption.

In terms of market performance, Ooma’s stock experienced a 0.82% increase in after-hours trading following the earnings release, reflecting investor confidence in the company’s strategic direction. The company remains focused on its core market segments, including cloud communications and POTS replacement services, supported by strategic partnerships and product innovations.

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