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Ooma (OOMA) Stock Jumps 11.2%: Will It Continue to Soar?

This story originally appeared on Zacks

Ooma (OOMA) shares rallied 11.2% in the last trading session to close at $22. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock’s 4.8% gain over the past four weeks.

OOMA’s rally is driven by its impressive leadership strategy that is aimed at developing enterprise business solutions and catering to small business customers. Post second-quarter earnings beat, the company believes that solid performance across its businesses together with various growth initiatives might boost its momentum for the second half of the fiscal year. Encouraged by significant business expansion efforts, robust demand for its services, along with diligent operational execution, is expected to drive Ooma’s financial performance in the long run. Thanks to Ooma’s optimistic outlook, analysts believe that the stock has big upside potential.

This internet phone service provider is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of -30.8%. Revenues are expected to be $48.02 million, up 11.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Ooma, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock’s price usually doesn’t keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on OOMA going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>

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