Ooma Story

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It appears Ooma may not recover as fast as we have hopped for as its price went down 9.87% today. The company's current daily volatility is 4.39 percent, with a beta of -0.03 and an alpha of 0.67 over DOW. As many baby boomers are still indifferent towards current volatility, Ooma Inc. Why are we still confident in our projection for a recovery.
Published over a month ago
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Breaking down Ooma (NYSE:OOMA) volatility slip
Ooma Inc currently holds roughly 23.29 M in cash with (4.67 M) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 1.05. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Ooma has an asset utilization ratio of 206.3 percent. This suggests that the company is making $2.06 for each dollar of assets. An increasing asset utilization means that Ooma Inc is more efficient with each dollar of assets it utilizes for everyday operations.
Investing in Ooma, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Ooma along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.

How important is Ooma's Liquidity

Ooma financial leverage refers to using borrowed capital as a funding source to finance Ooma Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Ooma financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Ooma's total debt and its cash.

How Ooma utilizes its cash?

To perform a cash flow analysis of Ooma, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Ooma is receiving and how much cash it distributes out in a given period. The Ooma cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Ooma Net Cash Flow from Operations is projected to decrease significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at (7.56 Million)

Acquisition by Yeh Jenny C of 482 shares of Ooma subject to Rule 16b-3

Legal trades by Ooma insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Ooma insider trading alert for grant of common stock by Yeh Jenny C, VP General Counsel & Sec., on 17th of September 2020. This event was filed by Ooma Inc with SEC on 2020-09-17. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking down Ooma Indicators

We consider Ooma somewhat reliable. Ooma Inc maintains Sharpe Ratio (i.e. Efficiency) of 0.0417, which implies the firm had 0.0417% of return per unit of risk over the last month. Our standpoint towards forecasting the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for Ooma Inc, which you can use to evaluate future volatility of the company. Please check Ooma Inc Semi Deviation of 3.26, coefficient of variation of 643.91, and Risk Adjusted Performance of 0.2285 to confirm if the risk estimate we provide is consistent with the expected return of 0.18%.
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Is Ooma slip permanent?

Ooma current semi deviation builds up over 3.26. Ooma Inc shows above-average downside volatility for the selected time horizon. We advise investors to inspect Ooma Inc further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Ooma future alpha.

Our Final Takeaway

Whereas some companies under the telecom services industry are still a bit expensive, Ooma may offer a potential longer-term growth to investors. The inconsistency in the assessment between current Ooma valuation and our trade advice on Ooma is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Ooma.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Ooma Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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