With the business potentially at an important milestone, we thought we'd take a closer look at Ooma, Inc.'s (NYSE:OOMA) future prospects. Ooma, Inc. provides communications services and related technologies for businesses and consumers in the United States and Canada. The US$395m market-cap company posted a loss in its most recent financial year of US$835k and a latest trailing-twelve-month loss of US$9.7m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Ooma's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Ooma

Consensus from 7 of the American Software analysts is that Ooma is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$1.2m in 2027. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 57% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Ooma's upcoming projects, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 3.6% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Ooma which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Ooma, take a look at Ooma's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Valuation: What is Ooma worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Ooma is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Ooma’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.