OOMA
Ooma, Inc.
$19.12
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 83.9% above fair value
You pay
$19.12
Bear
$7.00
Fair
$10.39
Bull
$13.73
Bear
$7.00
-63.4%
6% stage 1 growth, 11% discount
Fair
$10.39
-45.6%
10% stage 1 growth, 11% discount
Bull
$13.73
-28.2%
13% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
52.7x
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 $21.00 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $10.39 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 $21.00 (from 15 analysts). Our estimate is 67% 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