OOMA
Ooma, Inc.
$20.18
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 69.9% above fair value
You pay
$20.18
Bear
$7.47
Fair
$11.88
Bull
$16.44
Bear
$7.47
-63.0%
7% stage 1 growth, 11% discount
Fair
$11.88
-41.1%
12% stage 1 growth, 11% discount
Bull
$16.44
-18.5%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
55.7x
Market is pricing in (growth)
22.6%
vs 11.9% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $23.67 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $11.88 per share.
Warnings
Stock-based employee pay equals 231% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $23.67 (from 15 analysts). Our estimate is 66% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions