Earnings Preview: Ooma

On Wednesday, May 26, Ooma OOMA will release its latest earnings report. Benzinga's outlook for Ooma is included in the following report.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Sell-side analysts expect Ooma's EPS to be near $0.08 on sales of $44.31 million. In the same quarter last year, Ooma reported earnings per share of $0.11 on revenue of $40.31 million.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

The analyst consensus estimate would represent a 27.27% decline in the company's EPS figure. Revenue would be up 9.93% from the year-ago period. Here is how the Ooma's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Ooma were trading at $16.03 as of May 24. Over the last 52-week period, shares are up 15.03%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Ooma is scheduled to hold the call at 17:00:00 ET and can be accessed here.