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On Friday, Cantor Fitzgerald’s analysts maintained a positive stance on DOMO (NASDAQ:DOMO), reiterating an Overweight rating and a price target of $11.00. Currently trading at $7.05, DOMO shows potential upside according to InvestingPro analysis, with analyst targets ranging from $7.00 to $16.00. The firm highlighted DOMO’s strong finish to Fiscal Year 2025, which ended in January, with the company outperforming FactSet consensus expectations across several key financial metrics, including billings, revenue, operating income and margin, and free cash flow and margin. While the company maintains a robust gross profit margin of 75%, InvestingPro data indicates some financial challenges, with current obligations exceeding liquid assets.
The analysts are keeping a close watch on the development of DOMO’s partnership ecosystem and the adoption of its consumption pricing model. Both aspects are reportedly evolving in line with expectations. The company’s subscription remaining performance obligation (RPO) saw a year-over-year increase of 14%, surpassing the $400 million mark. More notably, current subscription RPO jumped by 38% year-over-year to $179 million, indicating a strong customer commitment to multi-year contracts with DOMO.
The company’s gross retention rate (GRR) has been consistent at 85% over the past three quarters, which suggests a stable churn rate. Management anticipates this metric to improve by 200 basis points throughout Fiscal Year 2026.
The analysts also noted the success of DOMO’s strategic focus on expanding its partner ecosystem. Deals sourced from this initiative are converting at approximately five times the previous rate, and close rates have improved to two to three times better than before. This strategy, according to Cantor Fitzgerald, is proving to be effective and is a key factor in their positive outlook on DOMO’s stock. For deeper insights into DOMO’s financial health and growth potential, including 6 additional ProTips and comprehensive valuation metrics, check out the detailed Pro Research Report available on InvestingPro.
In other recent news, Domo Inc . reported fourth-quarter fiscal year 2025 earnings that exceeded analyst expectations, with an earnings per share (EPS) of -$0.05 compared to the forecasted -$0.17. The company also surpassed revenue projections, recording $78.8 million against the expected $78.06 million. Despite a 2% year-over-year revenue decline, JMP Securities maintained a Market Outperform rating for Domo, with a price target of $16, citing the strong earnings results. Additionally, Domo’s subscription revenue was reported at $71.9 million, aligning with expectations and reflecting flat growth from the previous quarter. Billings reached $102.6 million, exceeding consensus estimates, although they marked a 3% decline from the previous year. DA Davidson initiated coverage on Domo with a Neutral rating, lowering the price target from $9 to $8 due to concerns over revenue deceleration. Analysts highlighted improvements in Domo’s EBIT profitability and subscription Remaining Performance Obligations (RPO), with long-term RPO growth reaching 38%. These developments indicate a mixed outlook for investors, balancing concerns of revenue slowdown with positive earnings surprises and strategic advancements.
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