A strong stock as of late has been Ooma (OOMA). Shares have been marching higher, with the stock up 14% over the past month. The stock hit a new 52-week high of $15.15 in the previous session. Ooma has gained 26.3% since the start of the year compared to the -6.1% gain for the Zacks Computer and Technology sector and the 71.2% return for the Zacks Communication - Components industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on March 4, 2026, Ooma reported EPS of $0.34 versus consensus estimate of $0.31.
For the current fiscal year, Ooma is expected to post earnings of $1.26 per share on $322.44 in revenues. This represents a 21.15% change in EPS on a 17.85% change in revenues. For the next fiscal year, the company is expected to earn $1.36 per share on $332.1 in revenues. This represents a year-over-year change of 7.28% and 2.99%, respectively.
Valuation Metrics
Ooma may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Ooma has a Value Score of C. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 11.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 44.3X. On a trailing cash flow basis, the stock currently trades at 30.9X versus its peer group's average of 20.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this is even more important than the company's VGM Score. Fortunately, Ooma currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Ooma passes the test. Thus, it seems as though Ooma shares could have a bit more room to run in the near term.
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SeeOoma, Inc. (OOMA) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
