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Ooma, Inc. (NYSE:OOMA): When Will It Breakeven?

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·3 min read
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Ooma, Inc. (NYSE:OOMA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Ooma, Inc. creates connected experiences for businesses and consumers in the United States, Canada, and internationally. The US$312m market-cap company posted a loss in its most recent financial year of US$19m and a latest trailing-twelve-month loss of US$11m shrinking the gap between loss and breakeven. The most pressing concern for investors is Ooma's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Ooma

Ooma is bordering on breakeven, according to the 7 American Telecom analysts. They expect the company to post a final loss in 2023, before turning a profit of US$8.2m in 2024. So, the company is predicted to breakeven approximately 4 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 65%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Ooma's upcoming projects, though, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. Ooma currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Ooma to cover in one brief article, but the key fundamentals for the company can all be found in one place – Ooma's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

  1. Valuation: What is Ooma worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Ooma is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Ooma’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.