by Ian Harvey
July 03, 2020
Shares of Ooma Inc were up 6.2% intraday yesterday as its cloud positioning makes it a beneficiary of the COVID-driven tech boost.
And, Stock Options Made Easy “Cut-to-the-Chase” Members were well-positioned to benefit; and made 140% potential profit based on a CALL OPTIONS trade so far. More could be likely!
The coronavirus pandemic continues to cause mayhem, and demand for cloud-based business services and video-streaming services is on the rise.
Demand for quality networking equipment and service keeps growing.
And, as Ooma, Inc.’s platforms serve as a communications hub, which offers cloud-based communications solutions, smart security, and other connected services, it is now in demand.
Which has given OOMA Inc a big boost lately as it has continued as a big mover, where the company saw its shares continue to rise more than 6% intraday yesterday and finally settle up $0.63 (+3.49%) at close of trading. The move came on solid volume too with far more shares changing hands than in a normal session. This breaks the recent trend of the company, as the stock is now trading above the volatile price range of $12.53 to $15.66 in the past one-month time frame.
More profit might be available for those traders that wish to continue to hold as there are still 104 days to go before expiry.
The recommended options trade for “Cut-to-the-Chase” Members.....
** OPTION TRADE: Buy OOMA OCT 16 2020 15.000
CALL at approximately $2.00.
The Recommended Trade…..
“Cloud-driven technology has been given a massive tailwind from the global stay-at-home initiate. Ooma Inc (NYSE: OOMA) is the #1 internet phone company, and its cloud positioning makes it one such beneficiary of the COVID-driven tech boost. Analysts have been driving OOMA EPS estimates higher and higher and propelling this stock towards a Strong Buy by many of the analysts.
Ooma's cloud-based communication products are becoming increasingly essential for businesses to operate remotely amid this global pandemic. The company has a robust long-term tailwind, and it appears this stock is breaking out of the mid-to-low teen range it’s been stuck in for the past 2 years.
Most of its revenue is being derived from its home subscription services segment, but the future growth of this enterprise is in its business segment. Ooma is growing its top at a healthy double-digit percentage pace, while its bottom line is itching to flip positive. Analysts are estimating profitability for fiscal 2020 and beyond.
There is an enormous growth opportunity in this niche cloud-based segment, and Ooma is only on the ground floor of its potential. According to the company's most recent earnings presentation, the global cloud PBX market (in which Ooma controls) is expected to grow into an $18.2 billion space with a compounded annual growth rate of 15.5% over the next 7 years.
About Ooma Inc .....
Ooma, Inc creates connected experiences for businesses and consumers in the United States, Canada, and internationally. The company's smart cloud-based SaaS platform serves as a communications hub, which offers cloud-based communications solutions, smart security, and other connected services.
Its business and residential solutions deliver PureVoice high-definition voice quality, advanced functionality, and integration with mobile devices; and platform helps to create smart workplace and homes by offering communications, monitoring, security, automation, productivity, and networking infrastructure applications.
According to the company website, "Omni is a cloud-based commercial phone service designed to bring premium enterprise-quality landline phone technologies to businesses (of all size). With just a high-speed Internet connection, businesses can tap into intelligent cloud-based phone features such as a virtual receptionist for custom call answering and routing, ring groups, extension dialing, call park, and a mobile app for taking business calls on the go."
Ooma last released its quarterly earnings data on Tuesday, May 26th.
The technology company reported $0.11 earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.13) by $0.24. Ooma had a negative net margin of 9.58% and a negative return on equity of 35.97%.
The company had revenue of $40.31 million during the quarter, compared to analysts’ expectations of $39.89 million.
As a group, equities research analysts anticipate that Ooma will post -0.29 EPS for the current year.
Ooma is partnering with Sprint/T-Mobile to release its new business phone service that targets small to medium-sized businesses. This vastly expands the business's addressable market, and partnering with this leading wireless duo will give Ooma much more exposure to potential customers.
OOMA Inc is only trading at 1.8 times forward sales, which is exceptionally low for a niche cloud leader.
The current growth estimate for this year calls for a significant earnings-per-share growth. Furthermore, the long-term growth rate is currently an impressive 47.7%, suggesting pretty good prospects for the long haul.
As well, the stock has actually seen estimates rise over the past month for the current fiscal year by about 150%.
Shares of Ooma have been assigned an average rating of “Hold” from the nine analysts that are currently covering the company. Two investment analysts have rated the stock with a sell rating, two have given a hold rating and five have assigned a buy rating to the company. The average 1 year price target among brokers that have issued a report on the stock in the last year is $19.50.
Several other equities analysts have recently commented on the company…..
Zacks Investment Research upgraded shares of Ooma Inc from a “hold” rating to a “buy” rating and set a $16.00 target price on the stock in a report on Thursday, March 12th.
Alliance Global Partners started coverage on shares of Ooma Inc in a report on Monday, March 16th. They issued a “buy” rating and a $21.00 target price on the stock.
ValuEngine downgraded shares of Ooma from a “buy” rating to a “hold” rating in a report on Friday, June 5th.
Finally, B. Riley upped their price target on shares of Ooma from $21.50 to $22.00 and gave the company a “buy” rating in a report on Friday, March 6th.
Ooma Inc has a market cap of $300.78 million, a P/E ratio of -18.97 and a beta of 0.68. The company has a debt-to-equity ratio of 0.15, a quick ratio of 0.86 and a current ratio of 1.09. Ooma has a 1 year low of $7.45 and a 1 year high of $15.37. The company has a 50-day moving average price of $12.30 and a two-hundred day moving average price of $12.64.”
The company’s expected earnings growth rate for the current quarter is more than 100% against the Communication - Components industry’s projected earnings decline of 14.5%.
Where Is Ooma Inc Stock Headed?
Is It Too Late To Jump On The Action?
Will Ooma Inc Shares Continue To Rise?
Will We Recommend Another Ooma Inc Options Trade?
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An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!