OOMA · Ooma
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $20.53
Note written ·
Price against the kill line
12.0% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $20.53, on record since 11 November 2026. The shares are down 10.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $20.53, just under the 50-day moving average, which would show the shares leading the S&P 500. Third-quarter revenue above the $84.5 million top of the guide, or a raised fiscal 2027 outlook, would also show the shares leading.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 31 July 2026, filed 4 September 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 83.2
- Revenue, change on a year (%)
- +25.4
- Gross margin (%)
- 61.3
- Operating margin (%)
- 4.8
- Free cash flow, four quarters ($M)
- 30.3
- Net cash, cash less debt ($M)
- −28.9
- Price to earnings (×)
- 45.6
- Enterprise value to sales (×)
- 1.7
All filed numbers
What Ooma reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 83.2 | +25.4 | 61.3 | 4.8 |
| first filed | 81.1 | +24.8 | 62.4 | 4.3 |
| first filed | 74.6 | +14.6 | 61.8 | 2.8 |
| first filed | 67.6 | +3.8 | 60.2 | 1.9 |
| first filed | 66.4 | +3.5 | 60.6 | 1.4 |
| first filed | 65.0 | +4.0 | 61.8 | −0.1 |
| Pre-tax income ($M) | 3.2 |
| Net income ($M) four quarters: 10.9 | 3.0 |
| Diluted shares, change on a year (%) against the quarter to 31 July 2025 | +2.7 |
| Operating cash flow ($M) | 37.1 |
| Capital spending ($M) | 6.8 |
| Free cash flow ($M) | 30.3 |
| Cash and short-term investments ($M) | 17.5 |
| Debt ($M) long-term debt plus short-term borrowings | 46.5 |
| Net cash, cash less debt ($M) | −28.9 |
| Deferred revenue ($M) +4.4% on a year | 18.1 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 11.4 |
| Inventory ($M) | 21.4 |
| Shareholders' equity ($M) | 98.4 |
| Market value ($M) | 499 |
| Enterprise value, market value plus net debt ($M) | 527 |
| Enterprise value to sales (×) | 1.7 |
| Enterprise value to operating income (×) | 48.4 |
| Price to earnings (×) | 45.6 |
| Price to book value (×) | 5.1 |
| Free-cash-flow yield (%) | 6.1 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 6.5% of shares outstanding sold short, 4.8 days of average trading to cover, +3.6% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $2.8M |
| 12 monthsfrom | $0 | $5.7M |
The thesis
Ooma's shares are more likely to lag the S&P 500 over the next three months. The raised fiscal 2027 revenue outlook of $332.0–333.5 million is the whole case, and the third-quarter report on 1 December 2026 settles whether delivery matches it.
The shares closed at $18.39 on 12 November 2026, 29.8% below the 52-week intraday high of $26.19 set on 27 August 2026. The three-month price change is minus 11.7%, and the close sits below the 50-day moving average of $20.65 and above the 200-day moving average of $17.95.
On 26 August 2026 Ooma reported second-quarter revenue of $83.228 million, up 25% from a year earlier, and guided third-quarter revenue to $83.7–84.5 million. The shares have fallen since that report with no company revision to the guidance.
Bullish and bearish views on Ooma, Inc.
The bull case on Ooma, Inc. (OOMA), in brief: guidance stands. The bear case: shares trade below the 50-day average.
Bull case
- Guidance stands. Ooma's 26 August 2026 release set fiscal 2027 revenue at $332.0–333.5 million and third-quarter adjusted (non-GAAP) net income at $9.8–10.2 million. Third-quarter revenue at or above $83.7 million would confirm the range.
- Analysts remain constructive. MarketBeat reported a consensus target of $25.00 on 6 October 2026, with six Buy ratings and one Hold. Freedom Broker raised its target from $24 to $25 on 1 October 2026.
- Cash generation supports the roll-up. Management reported $13.1 million of quarterly operating cash flow and $30.2 million of trailing-twelve-month free cash flow on 26 August 2026.
- AirDial adds a second growth line. Management reported 75% growth in AirDial services revenue from a year earlier and more than 40 resale partners on 26 August 2026. AirDial replaces copper phone lines for businesses.
Bear case
- Shares trade below the 50-day average. The close of $18.39 on 12 November 2026 compares with a 50-day moving average of $20.65. The shares closed at $17.56 on 5 November 2026, the lowest close of the last six sessions.
- Insiders sold in September. SEC Form 4 filings show CEO Eric Stang sold 36,322 shares at $23.26 on 14 September 2026, and director Susan Butenhoff sold 9,000 shares at $22.02 on 22 September 2026. Chief Legal Officer Jenny Yeh sold 1,747 shares at $23.00 on 17 September 2026 under a Rule 10b5-1 plan, a pre-arranged selling schedule.
- Acquisitions blur the growth rate. FluentStream and Phone.com closed in December 2025, so the 25% revenue increase reported on 26 August 2026 includes acquired revenue and gives no organic rate.
- Debt exceeds cash. At 31 July 2026, Ooma held $17.5 million of cash and investments against $47 million of debt.
- The prior-year report preceded the 52-week low. Ooma reported fiscal third-quarter 2026 results on 8 December 2025, and the shares reached their 52-week closing low of $10.58 on 9 December 2025.
Price setup
The close of $18.39 on 12 November 2026 is 29.8% below the 52-week intraday high of $26.19 (27 August 2026). The 3-month reference close was $20.83 on 14 August 2026.
The 200-day moving average of $17.95 sits just under the last close. The shares closed at $17.56 on 5 November 2026 and $17.81 on 10 November 2026, and have held above that average since. A fall below it would extend the decline; a recovery toward the 50-day moving average of $20.65 would show buyers returning.
Ooma confirmed it will release third-quarter fiscal 2027 results after the market closes on 1 December 2026, with a call at 5:00 p.m. Eastern. That report is the main event for the shares.
Catalysts ahead
- 1 December 2026: Third-quarter fiscal 2027 results after the market close, with a call at 5:00 p.m. Eastern. Reported revenue tests the $83.7 million low end of the third-quarter guide and the credibility of the raised $332.0–333.5 million full-year range.
What would change the view
A daily close above $20.53, just under the 50-day moving average, which would show the shares leading the S&P 500. Third-quarter revenue above the $84.5 million top of the guide, or a raised fiscal 2027 outlook, would also show the shares leading.
What it trades with
No current investment theme carries Ooma. It is a small-capitalisation provider of cloud phone services to small businesses and homes, so it tends to move with small-cap software and communications peers and with sentiment toward acquisition-led growth stories. Its December 2025 acquisitions make its results less comparable with organic-growth peers until the deals pass their anniversary in December 2026.
The evidence, claim by claim (7)
- Ooma reported second-quarter fiscal 2027 revenue of $83.228 million, up 25% from a year earlier. Ooma Q2 fiscal 2027 results release (Business Wire) · as of
- Ooma raised fiscal 2027 revenue guidance to $332.0–333.5 million and guided third-quarter revenue to $83.7–84.5 million and non-GAAP net income to $9.8–10.2 million. Ooma Q2 fiscal 2027 results release (Business Wire) · as of
- Ooma held $17.5 million of cash and investments and $47 million of debt at quarter-end. Ooma fiscal 2027 second-quarter 10-Q, period ended 31 July 2026 · as of
- CEO Eric Stang sold 36,322 shares at $23.26 on 14 September 2026; director Susan Butenhoff sold 9,000 shares at $22.02 on 22 September 2026. SEC Form 4 filings · as of
- MarketBeat reported a consensus price target of $25.00 for Ooma, with six Buy ratings and one Hold. MarketBeat · as of
- Ooma closed at $18.39, 29.8% below its 52-week intraday high of $26.19 set on 27 August 2026; the three-month price change was minus 11.7%. Split-adjusted daily closes · as of
- Ooma will release third-quarter fiscal 2027 results after the market closes on 1 December 2026, with a call at 5:00 p.m. Eastern. Ooma scheduling press release · as of
Sources
- Ooma Reports Fiscal Second Quarter 2027 Financial Results · secure.businesswire.com ·
- Ooma Schedules Release of Third Quarter Fiscal 2027 Results · investors.ooma.com
- MarketBeat ·