Value
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.0 |
| P/S | 9.0 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 8.6 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 13.3x
- ▸PEG: 0.04
OOMA · Why this verdict
Why Ooma (OOMA) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictHOLD
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue growth of 25% year-over-year is described as strong, supporting the bull case. Growth breakdown | Revenue growth stays above 15% YoY over the next several quarters. | →Stable |
| CounterA slowdown from peak growth rates is common as VOIP and communications SaaS names mature and face more competition. | ||
Ooma converts cash exceptionally well, with 388% FCF-to-net-income and a strong Piotroski F-Score of 8/9. Quality breakdown | FCF-to-net-income conversion stays above 200% while the Piotroski score holds at 7/9 or higher. | →Stable |
| CounterHigh FCF conversion at a small-cap SaaS name can be inflated by working-capital timing rather than durable operating leverage. | ||
The stock is in a technical breakout, a golden cross, trading above all major moving averages, with RSI at 68 and bullish MACD. Chart pattern detection | The stock remains above its 200-day moving average with RSI staying below 80. | →Stable |
| CounterBreakouts that occur just as the stock reaches its price target risk stalling out quickly without further target upgrades. | ||
Notable insider selling of $1,421,332 (0.265% of market cap) is flagged as a moderate insider warning alongside the value-trap signals. Insider breakdown | Insider selling activity declines to below $500,000 in the next 90-day window. | →Stable |
| CounterInsider sales at a company with a strong beat streak may simply reflect routine diversification via pre-scheduled selling plans (Rule 10b5-1) rather than a negative signal. | ||
The asymmetry ratio failed at 0.18, well below the 1.5 threshold, since the stock has already reached its analyst target with only 2.7% upside remaining against 14.9% downside risk. Engine gate (failed) | The asymmetry ratio rises above 1.0 as either the price target is raised or the stock pulls back toward support. | →Stable |
| CounterA strong breakout combined with a perfect earnings beat streak could push the stock well past its current target before any of the downside risk materializes. | ||
Revenue growth of 25% year-over-year is described as strong, supporting the bull case.
→StableGrowth breakdown
- Expectation
- Revenue growth stays above 15% YoY over the next several quarters.
CounterA slowdown from peak growth rates is common as VOIP and communications SaaS names mature and face more competition.
Ooma converts cash exceptionally well, with 388% FCF-to-net-income and a strong Piotroski F-Score of 8/9.
→StableQuality breakdown
- Expectation
- FCF-to-net-income conversion stays above 200% while the Piotroski score holds at 7/9 or higher.
CounterHigh FCF conversion at a small-cap SaaS name can be inflated by working-capital timing rather than durable operating leverage.
The stock is in a technical breakout, a golden cross, trading above all major moving averages, with RSI at 68 and bullish MACD.
→StableChart pattern detection
- Expectation
- The stock remains above its 200-day moving average with RSI staying below 80.
CounterBreakouts that occur just as the stock reaches its price target risk stalling out quickly without further target upgrades.
Notable insider selling of $1,421,332 (0.265% of market cap) is flagged as a moderate insider warning alongside the value-trap signals.
→StableInsider breakdown
- Expectation
- Insider selling activity declines to below $500,000 in the next 90-day window.
CounterInsider sales at a company with a strong beat streak may simply reflect routine diversification via pre-scheduled selling plans (Rule 10b5-1) rather than a negative signal.
The asymmetry ratio failed at 0.18, well below the 1.5 threshold, since the stock has already reached its analyst target with only 2.7% upside remaining against 14.9% downside risk.
→StableEngine gate (failed)
- Expectation
- The asymmetry ratio rises above 1.0 as either the price target is raised or the stock pulls back toward support.
CounterA strong breakout combined with a perfect earnings beat streak could push the stock well past its current target before any of the downside risk materializes.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ooma combines strong cash conversion, solid growth, and a technical breakout with a perfect earnings beat streak, but the stock has already reached its price target and notable insider selling tempers the setup.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.3 |
| ROA | 2.0 |
| Gross margin | 8.3 |
| Op margin | 1.7 |
| Net margin | 1.6 |
| Current ratio | 3.8 |
| FCF quality | 10.0 |
| Moat | 7.1 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 388% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
8.7/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 8.7 |
- ▸Strong growth: 25% YoY
Momentum
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 2.0 |
| MA position | 9.0 |
| Volume | 2.5 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.4 |
| erm sentiment | 5.0 |
Insider
4.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 8.0 |
- ▸Notable insider selling — $1,421,332 (0.261% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.1 |
| quality rank | 4.3 |
| growth rank | 7.5 |
Technical
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 2.0 |
| 52w position | 7.9 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.1 |
| days to cover | 8.2 |
| volatility | 2.8 |
| put call | 10.0 |
| implied vol | 6.8 |
| max pain risk | 3.0 |
| beta | 6.2 |
| debt equity | 6.8 |
- ▸Above max pain $10
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.8 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:5.7>=5.5
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:49d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (1)
- INSIDER:0.26%=MODERATE
Reward-to-Risk
0.14
Upside
+2.0%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 67, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.5B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.7>=5.5. Top dim: Growth at 8.7; weakest: Technical at 3.9. No conviction either direction.
The strongest dimensions are Growth at 8.7, Catalyst at 7.5, and Risk (lower is worse) at 6.5; the weakest are Technical at 3.9, Insider at 4.3, and Peer rank at 4.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.14 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Cash Conversion Quality
Trip ifFCF-to-net-income conversion falls below 200% from the current 388%.
- P2Strong Revenue Growth
Trip ifRevenue growth falls below 10% YoY from the current 25% pace.
- P3Technical Breakout Momentum
Trip ifThe stock closes below its 200-day moving average or RSI exceeds 85.
- P4Notable Insider Selling
Trip ifInsider selling exceeds $3,000,000 in a single 90-day window, more than double the current $1,421,332.
- P5Target Reached Asymmetry Fail
Trip ifDownside risk to stop-loss exceeds 20% while upside to target stays below 5%.