Ooma (NYSE:OOMA – Get Free Report) and 8X8 (NASDAQ:EGHT – Get Free Report) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Ooma and 8X8, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ooma | 0 | 1 | 4 | 0 | 2.80 |
| 8X8 | 2 | 1 | 3 | 0 | 2.17 |
Ooma presently has a consensus target price of $14.50, indicating a potential upside of 31.10%. 8X8 has a consensus target price of $2.83, indicating a potential upside of 49.12%. Given 8X8’s higher probable upside, analysts clearly believe 8X8 is more favorable than Ooma.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ooma | $236.74 million | 1.25 | -$830,000.00 | ($0.10) | -110.60 |
| 8X8 | $723.57 million | 0.33 | -$67.59 million | ($0.55) | -3.45 |
Ooma has higher earnings, but lower revenue than 8X8. Ooma is trading at a lower price-to-earnings ratio than 8X8, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
80.4% of Ooma shares are held by institutional investors. Comparatively, 94.0% of 8X8 shares are held by institutional investors. 9.8% of Ooma shares are held by insiders. Comparatively, 1.1% of 8X8 shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Risk and Volatility
Ooma has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, 8X8 has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500.
Profitability
This table compares Ooma and 8X8’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ooma | -2.04% | -2.22% | -1.13% |
| 8X8 | -8.65% | -6.51% | -0.88% |
Summary
Ooma beats 8X8 on 8 of the 14 factors compared between the two stocks.
About Ooma
Ooma, Inc. provides communications services and related technologies for businesses and consumers in the United States and Canada. The company's products and services include Ooma Office, a cloud-based multi-user communications system for small and medium-sized businesses; Ooma Connect, which delivers fixed wireless internet connectivity; and Ooma Enterprise, a unified-communications-as-a-service (UCaaS) solution. It also provides Ooma AirDial, a plain old telephone service; PureVoice HD, a residential phone services; Ooma basic that provides unlimited personal calling within the United States; and Ooma Premier, a suite of advanced calling features on a monthly or annual subscription basis. In addition, the company offers Ooma Telo, a home communications solution designed to serve as the primary phone line in the home; Ooma Telo Air, a wireless Ooma Telo with built-in Wi-Fi and Bluetooth; and Ooma Telo LTE, which combines the Ooma Telo base station with the Ooma LTE Adapter and battery back-up. Further, it provides Ooma Mobile HD app that allows users to make and receive phone calls and access Ooma features and settings; 2600Hz provides business communication applications; Talkatone mobile app; and OnSIP, an UCaaS solutions. The company offers its products through direct sales, distributors, retailers, and resellers, as well as online and sale representatives. Ooma, Inc. was incorporated in 2003 and is headquartered in Sunnyvale, California.
About 8X8
8×8, Inc. provides voice, video, chat, contact center, and enterprise-class application programmable interface (API) Software-as-a-Service solutions for small business, mid-market, enterprise customers, government agencies, and other organizations worldwide. It offers 8×8 Work, a self-contained end-to-end united communications solution that delivers voice services, secure video meetings, and unified messaging, including direct messages, public and private team messaging rooms, and peer-to-peer short and multimedia messaging; 8×8 Contact Center, a cloud-based contact center as-a-service solution; and 8×8 Engage, an artificial intelligence-powered solution that equips customer-facing employees outside the contact center with the tools and capabilities to deliver successful customer engagements. The company also provides 8×8 Communications Platform as-a-Service, a communications platform-as-a-service capabilities that enable businesses to directly integrate its platform services within their websites, mobile apps, and business systems for personalized customer engagement; and Solutions for Microsoft Teams. In addition, it offers and X1 through X4 and X5 through X8, which provide enterprise-grade voice, unified communications, and video meetings and team collaboration, and contact center solutions. The company markets its services to end users through industry conferences, trade shows, webinars, and local and digital advertising channels. 8×8, Inc. was incorporated in 1987 and is headquartered in Campbell, California.
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