Ooma, Inc. Fundamental Analysis
Ooma, Inc. (OOMA) shows weak financial fundamentals with a PE ratio of 51.24, profit margin of 3.17%, and ROE of 10.01%. The company generates $0.3B in annual revenue with moderate year-over-year growth of 8.50%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 45.3/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze OOMA's fundamental strength across five key dimensions:
Efficiency Score
WeakOOMA struggles to generate sufficient returns from assets.
Valuation Score
ModerateOOMA shows balanced valuation metrics.
Growth Score
ModerateOOMA shows steady but slowing expansion.
Financial Health Score
ModerateOOMA shows balanced financial health with some risks.
Profitability Score
WeakOOMA struggles to sustain strong margins.
Key Financial Metrics
Is OOMA Expensive or Cheap?
P/E Ratio
OOMA trades at 51.24 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, OOMA's PEG of 0.11 indicates potential undervaluation.
Price to Book
The market values Ooma, Inc. at 4.91 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 19.32 times EBITDA. This signals the market has high growth expectations.
How Well Does OOMA Make Money?
Net Profit Margin
For every $100 in sales, Ooma, Inc. keeps $3.17 as profit after all expenses.
Operating Margin
Core operations generate 2.70 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.01 in profit for every $100 of shareholder equity.
ROA
Ooma, Inc. generates $4.05 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Ooma, Inc. produces operating cash flow of $30.37M, showing steady but balanced cash generation.
Free Cash Flow
Ooma, Inc. produces free cash flow of $24.53M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.89 in free cash annually.
FCF Yield
OOMA converts 5.26% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
51.24
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.11
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.91
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.62
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.16
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.94
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.05
vs 25 benchmark
How OOMA Stacks Against Its Sector Peers
| Metric | OOMA Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 51.24 | 24.20 | Worse (Expensive) |
| ROE | 10.01% | 959.00% | Weak |
| Net Margin | 3.17% | -68674.00% (disorted) | Weak |
| Debt/Equity | 0.16 | 3.02 | Strong (Low Leverage) |
| Current Ratio | 0.94 | 1.71 | Weak Liquidity |
| ROA | 4.05% | -2558.00% (disorted) | Weak |
OOMA outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Ooma, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
33.66%
Industry Style: Growth, Technology, Streaming
High GrowthEPS CAGR
71.05%
Industry Style: Growth, Technology, Streaming
High GrowthFCF CAGR
377.47%
Industry Style: Growth, Technology, Streaming
High Growth