Shares of Domo rose over 8% on Friday after reporting stronger-than-expected 2Q results and providing investors with an upbeat FY21 outlook. The cloud-based software provider is benefiting from the demand for digital transformation and cloud computing.
Domo’s (DOMO) 2Q revenues climbed 23% to $51.1 million year-over-year and surpassed analysts’ expectations of $48 million. The company posted a net loss per share of $0.37, which was smaller than the Street consensus of a loss of $0.53. In the year-ago quarter, reported a loss of $0.96. Billings during the quarter grew 23% to $47.6 million year-on-year.
Domo CEO Josh James said, “In Q2, we once again made great progress on this front as we help CIOs, CDOs and IT leaders solve some of their most complex and strategic data challenges at a speed and scale our customers have told us they’ve never seen.”
Buoyed by strong quarterly results, Domo raised its revenue outlook for fiscal 2021 to $202.5-$206.5 million from $194-$200 million. The company also narrowed its annual adjusted loss per share guidance range to $1.83-$1.91 from $1.96-$2.06. For 3Q, Domo expects revenues between $51.2 million and $52.2 million. The enterprise software developer forecasts a net loss per share in the range of $0.42-$0.46. (See DOMO stock analysis on TipRanks).
Following its earnings, Needham analyst Jack Andrews lifted the stock’s price target to $61 (51.4% upside potential) from $47 and reiterated a Buy rating. Andrews noted that Domo closed a significant amount of large deals and 2Q results benefited from pandemic-related tailwinds and better sales executions.
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 3 Buys and 3 Holds. With shares up 85.5% year-to-date, the average price target of $47.17 implies further upside potential of 17.1% from current levels.
The post Domo Hikes FY21 Sales Outlook Fueled By Cloud Demand appeared first on TipRanks Financial Blog.