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Investing.com - Benchmark maintained its Buy rating and $20.00 price target on Ooma (NYSE:OOMA) ahead of the company’s earnings report scheduled for Tuesday. According to InvestingPro data, the stock currently trades at $12.04, suggesting significant upside potential, with analysts’ targets ranging from $16 to $20.
The firm highlighted Ooma’s AirDial product as a key focus area, noting the significant market opportunity presented by more than 20 million North American Plain Old Telephone Service (POTS) lines requiring urgent action to avoid cost increases and reduce business disruptions. Seven analysts have recently revised their earnings expectations upward, reflecting growing confidence in the company’s strategy.
Benchmark identified four major segments in Ooma’s product portfolio: cloud communications for smaller businesses, POTS replacement solutions featuring AirDial for both business and residential customers, wholesale platform services including 2600Hz, and residential telephony, which the firm described as a "cash cow."
The research firm noted that while Ooma is currently focused on North America, similar opportunities exist internationally, particularly in Europe.
Benchmark also observed that customers are increasingly adopting premium service tiers, which is driving average revenue per user (ARPU) growth for the company.
In other recent news, Ooma Inc. announced the expansion of its equity incentive and employee stock purchase plans after receiving shareholder approval. The amendments will increase the shares authorized for issuance under the Equity Incentive Plan by 330,000 and under the Employee Stock Purchase Plan by 795,144. This move aims to attract, retain, and motivate employees, directors, and consultants by offering them opportunities to acquire a proprietary interest in the company. Additionally, Ooma reported its first-quarter fiscal year 2026 results, with non-GAAP earnings per share of $0.20, surpassing the consensus estimate of $0.18. Revenue for the quarter was $65.0 million, slightly above the consensus estimate of $64.8 million, marking a 4% year-over-year increase. Citizens JMP analysts maintained a Market Perform rating on Ooma, while Benchmark analyst Matthew Harrigan reiterated a Buy rating with a $20.00 price target. A noteworthy development from the earnings call was the confirmation that Comcast has begun reselling Ooma’s AirDial product. This reflects a trend in the cable industry to adopt and share innovative products.
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