Ooma stock rating held at Market Perform by Citizens ahead of investor day

Citizens maintained its Market Perform rating for Ooma Inc. (NYSE: OOMA) as the company prepares for its investor day on September 29. The firm highlighted AirDial as a key growth driver, noting that AirDial services revenue jumped 75% year-over-year in the company's fiscal second quarter of 2027. Management attributed the surge in demand to the deactivation of copper lines and an addressable market of over 10 million U.S. POTS lines.

Ooma is seeing improved profitability and cash generation, driven by acquisition synergies and operating leverage. Adjusted EBITDA reached 15% of revenue in the fiscal second quarter of 2027, up from 9% in fiscal year 2025. The company generated $306.59 million in revenue over the past year, a 17% increase, while maintaining a healthy gross profit margin of 61%.

Six analysts have recently raised their earnings estimates for the upcoming period. Citizens sees potential in AI monetization, as Ooma leverages new AI capabilities to push users towards higher-priced tiers and boost average revenue per user. Investors are eager for clearer insights into Ooma's organic long-term growth rate, the impact of AirDial, and the path to achieving the company's growth targets.

Ooma recently reported fiscal second-quarter results that beat Wall Street expectations, with adjusted earnings of 35 cents per share on $83.2 million in revenue, surpassing estimates of 33 cents per share and $81.72 million in revenue. The strong performance was fueled by expansion of AirDial, acquisitions like FluentStream and Phone.com, and robust growth in the business segment.

Freedom Broker raised its price target for Ooma shares to $24.00 from $20.00, maintaining a Buy rating, citing the company's impressive revenue, adjusted EBITDA, and earnings per share growth.