Shares of Domo (NASDAQ:DOMO) have jumped today, up by 20% as of noon EDT, following some bullish commentary from Wall Street. Needham reiterated a buy rating on Domo stock while adjusting its price target from $31 to $25 to accommodate recent market activity.
Analyst Jack Andrews remains optimistic on Domo, noting that management has expressed plans to cut costs in order to better weather the COVID-19 crisis. The coronavirus pandemic does not appear to have meaningfully impacted Domo's sales pipeline, according to Andrews. Needham is encouraged that Domo is taking proactive steps to bolster cash flow and believes investors should appreciate the company's "newfound expense discipline."
The tech company is still unprofitable, posting an adjusted net loss of $103 million last fiscal year even though adjusted operating expenses declined to $211 million.
Shares have tanked in recent weeks along with the broader market, leading Needham to tweak its price target. Before today's jump, that $25 valuation estimate represented over 100% upside compared to Friday's close. Needham has reiterated its buy rating on Domo numerous times over the past month.
Separately, Domo filed its 10-K annual report today and outlined potential risks it faces related to the coronavirus. Travel restrictions have hurt its sales capabilities that have historically been conducted in person.
"As of the date of this report, we do not yet know the extent of the negative impact on our ability to attract, serve, retain or upsell customers," the company added. "Furthermore, existing and potential customers may choose to reduce or delay technology spending in response to the coronavirus outbreak, or attempt to renegotiate contracts and obtain concessions, which may materially and negatively impact our operating results, financial condition and prospects."