Ooma (OOMA) Profitability Turnaround Reinforces Bullish Earnings Growth Narrative

Ooma (OOMA) has kicked off Q1 2027 with revenue of about US$81.1 million and basic EPS of roughly US$0.09, alongside net income of around US$2.6 million. This sets a clear earnings tone for the new fiscal year. The company has seen quarterly revenue move from about US$65.0 million and a small net loss in Q1 2026 to roughly US$81.1 million and a net profit of around US$2.6 million in Q1 2027. Trailing twelve month EPS sits at about US$0.33 on revenue of roughly US$289.7 million, so the latest numbers extend a cleaner profitability profile that puts margins firmly in focus for investors.

See our full analysis for Ooma.

With the headline figures on the table, the next step is to set these results against the dominant stories around Ooma's growth, profitability, and risk to see which narratives hold up and which look out of sync with the data.

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TTM profit flips from losses to US$9.2 million

• Over the last twelve months, Ooma moved from a TTM net loss of about US$6.9 million in Q4 2025 to TTM net income of roughly US$9.2 million in Q1 2027, while TTM revenue rose from around US$256.9 million to about US$289.7 million.
• Consensus narrative points to business focused offerings and AI powered features as key drivers, and this earnings shift lines up with that view in some areas:
  • The move from a TTM loss of around US$4.9 million in Q1 2026 to TTM profit of about US$9.2 million in Q1 2027 sits alongside comments about higher ARPU Office Pro and Pro Plus users and recurring business subscription revenue supporting margins.
  • At the same time, the consensus also flags shrinking residential revenue, so the TTM profit improvement suggests business and partner channels have, so far, offset that pressure at the overall company level.

High P/E of 52.2x meets profit growth story

• The stock is shown trading on a trailing P/E of about 52.2x compared with around 30x for the US Software industry and roughly 49.3x for peers, while five year earnings growth is cited at 22.3% per year and earnings are forecast to grow about 32.7% per year.
• Bulls argue that strong earnings momentum justifies paying up, and the current figures heavily support parts of that case but also highlight a trade off:
  • The shift to profitability, with TTM EPS moving from a loss of about US$0.26 in Q4 2025 to around US$0.33 in Q1 2027, lines up with the bullish view that expanding business solutions and higher margin tiers are improving earnings visibility.
  • However, with the P/E already above both industry and peer averages, the bullish claim that the stock has room to rerate further requires confidence that the forecast 32.7% earnings growth can materialise without slipping, despite more modest revenue growth expectations.

Supporters who think earnings momentum is only getting started often dig into the full bullish case to see how it lines up with these numbers 🐂 Ooma Bull Case

Slower 7.8% revenue forecast tests the bearish view

• Revenue is forecast to grow about 7.8% per year, which is below the cited US market forecast of 11.8% per year, even though models in the dataset show a DCF fair value of roughly US$44.50 versus the current share price of about US$17.43.
• Bears focus on slower top line expectations and integration risk, and the data both backs and challenges that cautious stance:
  • Bearish commentary highlights reliance on AirDial demand, reseller intensity and acquisitions like FluentStream and Phone.com, and the 7.8% revenue growth forecast versus the higher 11.8% broader market rate fits concerns that revenue may trail the wider market.
  • On the other hand, the gap between the current price of roughly US$17.43 and the cited DCF fair value of about US$44.50 suggests that even with those revenue assumptions, modelled cash flows come out materially higher than what the share price currently reflects.

Investors who lean toward the cautious side often look at the fuller bearish story to see how these slower revenue forecasts and integration risks might affect that gap to modelled value 🐻 Ooma Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Ooma on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With bullish and bearish angles both in play, the real question is where you land on the spectrum. Act now by weighing the data, and then check the balance of potential upsides and concerns in the 4 key rewards and 1 important warning sign

See What Else Is Out There

Ooma's high P/E of about 52.2x, alongside slower 7.8% revenue forecasts versus the broader 11.8% market outlook, raises questions about paying a premium for this growth profile.

If you are uneasy about that premium and want stocks where price and fundamentals look more aligned, check out the 46 high quality undervalued stocks to quickly spot ideas that might offer a tighter link between earnings power and valuation.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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