As of May 23, 2025, Ooma Inc has a Discounted Cash Flow (DCF) derived fair value of $0.07 per share. With the current market price at $13.36, this represents a potential upside of -99.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $0.07 |
| Potential Upside (5-year) | -118.8% |
| Potential Upside (10-year) | -99.5% |
| Discount Rate (WACC) | 5.0% - 6.3% |
Revenue is projected to grow from $257 million in 01-2025 to $562 million by 01-2035, representing a compound annual growth rate of approximately 8.1%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 01-2025 | 257 | 8% |
| 01-2026 | 271 | 5% |
| 01-2027 | 291 | 7% |
| 01-2028 | 329 | 13% |
| 01-2029 | 346 | 5% |
| 01-2030 | 380 | 10% |
| 01-2031 | 410 | 8% |
| 01-2032 | 444 | 8% |
| 01-2033 | 476 | 7% |
| 01-2034 | 521 | 10% |
| 01-2035 | 562 | 8% |
Net profit margin is expected to improve from -3% in 01-2025 to 1% by 01-2035, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 01-2025 | (7) | -3% |
| 01-2026 | (4) | -1% |
| 01-2027 | (2) | -1% |
| 01-2028 | (0) | 0% |
| 01-2029 | 2 | 1% |
| 01-2030 | 5 | 1% |
| 01-2031 | 5 | 1% |
| 01-2032 | 5 | 1% |
| 01-2033 | 6 | 1% |
| 01-2034 | 6 | 1% |
| 01-2035 | 7 | 1% |
with a 5-year average of $5 million. Projected CapEx is expected to maintain at approximately 2% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 01-2026 | 6 |
| 01-2027 | 6 |
| 01-2028 | 7 |
| 01-2029 | 7 |
| 01-2030 | 7 |
| 01-2031 | 8 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 13 |
| Days Inventory | 83 |
| Days Payables | 39 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2026 | 0 | (1) | 6 | 7 | (12) |
| 2027 | 3 | (0) | 7 | 0 | (4) |
| 2028 | 5 | (0) | 8 | 1 | (3) |
| 2029 | 8 | 0 | 8 | 3 | (3) |
| 2030 | 12 | 1 | 9 | 2 | 0 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -118.8% |
| 10-Year DCF (Growth) | 0.07 | -99.5% |
| 5-Year DCF (EBITDA) | 1.15 | -91.4% |
| 10-Year DCF (EBITDA) | 1.71 | -87.2% |
Is Ooma Inc (OOMA) a buy or a sell? Ooma Inc is definitely a sell. Based on our DCF analysis, Ooma Inc (OOMA) appears to be overvalued with upside potential of -99.5%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $13.36.