Please ensure Javascript is enabled for purposes of website accessibility

Here's How Domo Inc. Stock Jumped 25% Higher This Morning

By Anders Bylund – Sep 7, 2018 at 12:08PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The business intelligence expert's first earnings report as a public company crushed Wall Street's expectations.

What happened

Shares of Domo (DOMO 4.60%) surged as much as 24.8% higher on Friday morning following the cloud-based business intelligence specialist's first earnings report as a public company. After hitting that high around 10:40 a.m. EDT, Domo's stock cooled down to a 7% gain near noon.

So what

In the second quarter of Domo's fiscal year 2019, sales rose 32% year over year to land at $34.3 million. Adjusted net losses stopped at $3.44 per share, compared to a $25.77 loss per share in the same period of last year.

Your average analyst would have settled for a loss of $3.95 per share on revenue near $32 million, so Domo beat Wall Street on both counts.

Looking ahead, Domo's management expects third-quarter revenue in the neighborhood of $35 million and a net loss of roughly $1.38 per share. The current analyst view calls for a loss of approximately $1.45 per share on top-line revenue around $33 million.

Businessman at his desk, working on a tablet, a laptop, and a smartphone all at once.

Image source: Getty Images.

Now what

Domo CEO Josh James has an ambitious view of his company's addressable market.

"Because Domo can digitally connect any organization and empower each of its employees, we believe our market potential is every working person with a mobile device," he said in a prepared statement. "The IPO has given us the capital needed to successfully execute our business plan."

That being said, Domo is a very young stock with the usual battery of volatility boosters: Investors and analysts don't really know the company yet, its sales tend to be lumpy, and it's hard to pin a fair value on a company with negative earnings and cash flows. It's probably best to watch Domo from the sidelines until the wild swings start to settle down.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Domo Stock Quote
$18.89 (4.60%) $0.83

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.