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Tuesday, JMP Securities analyst team reiterated a Market Outperform rating on DOMO (NASDAQ:DOMO), maintaining a $16.00 price target. The stock, currently trading at $7.18, has experienced significant volatility with a beta of 2.29, according to InvestingPro data. The analysis suggests DOMO is currently undervalued compared to its Fair Value. Despite concerns about Domo's financial health, including an 85% gross retention rate in the fourth quarter, a forecast of a 1% revenue decline for fiscal year 2026, and a balance sheet showing approximately $45 million in cash against roughly $118 million in debt, JMP sees a promising future for the company. InvestingPro analysis reveals a concerning financial health score of 1.47 (labeled as 'WEAK'), with current ratio at 0.56 indicating potential liquidity challenges. Get access to 6 more crucial ProTips and comprehensive financial analysis with InvestingPro. The optimism is based on several factors, such as Domo's shift to a consumption model, now over 65% of Annual Recurring Revenue (ARR), with expectations of reaching 90% by the end of fiscal year 2026.
Domo's continuous innovation, highlighted by the introduction of its Agent Catalyst tool, which garnered significant customer interest, is another reason for JMP's positive outlook. The company's strategic partnerships, particularly with Snowflake (NYSE:SNOW), have improved its sales prospects, leading to a substantial increase in close rates for its stage three leads.
JMP analysts also point out Domo's attractive valuation, currently at only 1.1 times Enterprise Value (EV) to revenue, which could make it an appealing acquisition target for larger cloud data warehouses or data management corporations. Despite the risks associated with its retention rates, revenue growth, and balance sheet, JMP believes that Domo's strategic moves and partnerships position it well for capital appreciation, especially for investors willing to tolerate higher risks. InvestingPro's deep-dive research report provides comprehensive analysis of DOMO's valuation metrics, growth potential, and risk factors, helping investors make more informed decisions in this volatile market environment.
In other recent news, Domo has announced a partnership with Human Capital Vue, aiming to enhance HR data integration and provide real-time insights for HR professionals. This collaboration has reportedly improved employee satisfaction and retention metrics, with clients experiencing a significant reduction in the time needed to build comprehensive dashboards. At Domopalooza 2025, Domo introduced several platform enhancements, including the new Agent Catalyst, designed to create autonomous AI agents for business process automation. The introduction of Agent Catalyst received strong interest, with over 200 customer requests shortly after its announcement. Citizens JMP recently maintained a Market Outperform rating and a $16 price target for Domo, citing positive customer feedback and strategic initiatives shared at the conference. Additionally, Cantor Fitzgerald affirmed an Overweight rating with an $11 price target, emphasizing Domo's strong partner ecosystem and fiscal performance. Domo's management has shared their focus on driving product adoption, integrating AI, and securing multi-year contracts for the fiscal year 2026. These developments highlight Domo's ongoing efforts to leverage AI and data products to drive value for organizations.
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