Company Overview
Ooma, Inc. provides communications services and related technologies for businesses and consumers across the United States and Canada, with key offerings including Ooma Office, a cloud-based multi-user communications system designed for small and medium-sized businesses, and Ooma Connect. The company operates within the Technology sector, specifically classified under the Software - Application industry, positioning it as a provider of digital infrastructure solutions that facilitate modern communication workflows. As of the latest data, Ooma holds a market capitalization of $392.74M and generates annual revenue of $273.60M, while the employee count is listed as N/A. These financial figures indicate that Ooma maintains a mid-cap status within the software application space, suggesting a firm that has moved beyond early-stage venture capital dependence but has not yet reached the scale of large-cap technology conglomerates. The revenue base of $273.60M supports a diversified portfolio of communication tools, though the absence of specific employee data prevents a direct correlation between workforce size and revenue generation efficiency in this context.
Financial Health
Ooma reported a revenue of $273.60M for the trailing twelve months, with a corresponding net income of $6.46M and an EBITDA of $15.32M. The significant gap between the $273.60M revenue and the $6.46M net income reveals a cost structure where operating expenses, taxes, and interest consume a substantial portion of top-line earnings, resulting in a net income that represents only a fraction of total sales. The company generated $35.47M in free cash flow, which provides a critical measure of financial flexibility, indicating that the business produces more cash than it spends on operations and capital expenditures, allowing for potential reinvestment or debt reduction. Margin analysis shows a gross margin of 61.1%, reflecting high efficiency in production or service delivery relative to sales, while the operating margin stands at 2.8% and the profit margin at 2.4%, indicating that after overheads and interest, profitability is tightly managed. On the balance sheet, Ooma holds $20.14M in cash against $68.88M in debt, creating a net debt position, and the debt-to-equity ratio is recorded at 74.13, which suggests a leveraged capital structure reliant on borrowed funds to finance operations. Liquidity is constrained by a current ratio of 0.93, meaning current liabilities exceed current assets, which implies the company may face challenges in meeting short-term obligations without relying on new financing or asset sales. Return on equity is 7.2% and return on assets is 1.4%, metrics that reveal that management generates moderate returns on shareholder capital but relatively low returns on the total asset base, potentially signaling that assets are not being utilized at peak efficiency or that the heavy debt load is suppressing asset-level returns.
Valuation Assessment
The trailing twelve-month P/E ratio is 61.96, while the forward P/E is 10.00, implying a stark expectation that future earnings will significantly outpace current reported earnings, possibly due to one-time charges in the past or anticipated massive growth in the coming year. The price-to-book ratio stands at 4.23, indicating that the market values the company at more than four times its book value, which suggests investors are pricing in significant intangible assets, growth potential, or brand value that are not captured on the balance sheet. Alternative valuation metrics include a price-to-sales ratio of 1.44 and an EV/EBITDA of 28.82, figures that suggest the market is willing to pay a premium for every dollar of sales and earnings before interest, taxes, depreciation, and amortization, consistent with high-growth software valuations despite current low net income. The stock has traded between a 52-week high of $14.83 and a 52-week low of $9.79, and without a specific current price provided in the facts, the range defines the volatility envelope within which the security has moved over the last year. The beta value is 1.33, indicating that the stock's price volatility is 33% higher than the broader market, meaning it tends to amplify market movements and carries higher systematic risk for investors seeking stability.
Growth & Income
Ooma achieved a revenue growth rate of 14.6% year-over-year, while earnings growth is listed as N/A, meaning there is no reported data to compare against revenue expansion, though the low net income relative to revenue suggests earnings are currently lagging behind top-line expansion. As a non-dividend payer, Ooma reports a dividend yield of N/A and a payout ratio of 0.0%, indicating that the company retains all its earnings rather than distributing them to shareholders, a strategy typical for companies reinvesting capital into growth initiatives. The absence of a dividend yield and a 0.0% payout ratio confirms that Ooma prioritizes internal funding for expansion over income distribution, aligning with its profile as a growth-oriented technology firm. The overall growth and income profile is characterized by robust revenue expansion and a complete retention of earnings, with investors relying on capital appreciation rather than dividend income for returns.