Value
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.1 |
| P/S | 9.0 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 8.2 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 14.4x
- ▸PEG: 0.10
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.
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VerdictHOLD
Overall score6.3/10
ConfidenceMEDIUM
MacroRISK_OFF
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.
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. | ↑Improving |
| 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. | ↑Improving |
| 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. | Tripped↑Improving |
| 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. | ↑Improving |
| 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.
↑ImprovingGrowth 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.
↑ImprovingQuality 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.
Tripped↑ImprovingChart 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.
↑ImprovingEngine 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.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.9 |
| ROA | 2.8 |
| Gross margin | 8.3 |
| Op margin | 1.9 |
| Net margin | 1.8 |
| Current ratio | 3.8 |
| FCF quality | 10.0 |
| Moat | 7.1 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 422% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
9.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.8 |
| EPS growth | 10.0 |
- ▸Strong growth: 25% YoY
Momentum
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 8.9 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 2.4 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.1 |
| Analyst rating | 7.3 |
| Price target | 7.0 |
- ▸LLM news sentiment: +0.41 (n=7)
- ▸Light analyst coverage (5.0) — signal dampened
Insider
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Notable insider selling — $2,277,977 (0.379% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.4 |
| quality rank | 4.4 |
| growth rank | 7.6 |
Technical
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.8 |
| support resistance | 5.7 |
| 52w position | 7.2 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.6 |
| days to cover | 7.6 |
| volatility | 0.0 |
| put call | 5.0 |
| implied vol | 1.5 |
| beta | 6.2 |
| debt equity | 7.6 |
| news risk | 6.0 |
- ▸High IV: 71%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.7 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+2Passed (6)
- MOMENTUM:5.4>=4.5
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.80
- EARNINGS_PROXIMITY:96d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.0=NEGATIVE
- INSIDER:0.38%=HEAVY
Warning (1)
- MOMENTUM:5.4<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.03
Upside
-0.4%
Downside
12.5%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 59, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.6B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 9.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.0=NEGATIVE, INSIDER:0.38%=HEAVY) reinforce the read. Current asymmetry R:R is -0.03 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 9.4, Catalyst at 7.3, and Sentiment at 7.2; the weakest are Technical at 4.9, Risk (lower is worse) at 5.2, and Peer rank at 5.2. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.03 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 MomentumTripped
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%.