The original verdict on Ooma was that its trading debut was a dud. The cloud-based telephony and connected services provider priced its IPO of 5 million shares of common stock at a price of $13.00 per share. Shares closed at $10.59 on Monday, and Ooma’s post-IPO range is $9.84 to $11.30.
The good news about the IPO was that all shares sold in the deal were actually sold by the company.
Credit Suisse, Bank of America Merrill Lynch and JMP Securities were Ooma’s joint book-running managers, and William Blair and Wunderlich were the co-managers. Here is how each of the analysts has rated Ooma as the quiet period came to an end:
- Merrill Lynch started Ooma with Buy rating and gave a $17 price objective.
- Credit Suisse started it at Outperform with a target price of $21.
- JMP Securities started it as Market Outperform with a $16 target.
- William Blair started it as Outperform.
- Wunderlich Securities started Ooma as Buy with a $17 target.
It almost seems odd that there has been no bump in the shares when you consider how the IPO was down over $2.00 from its pricing. Ooma shares were up just three cents at $10.85 in late morning trading on Tuesday.
The reception was poor, but the implied value from the five analyst calls from underwriting firms would generate an expected gain of close to 50%.
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