Domo Climbs on Quarterly Surprise, Word of 'Large Deal'

Several analysts raise their share price targets on Domo, the cloud software company.
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Domo  (DOMO) - Get Report was climbing Friday after a Cowen analyst raised his price target on shares of the cloud software company to $50 from $42, saying he's heard about a very large deal in the pipeline.

Shares of the Silicon Slopes, Utah-based company were climbing 9.8% to $40.92.

Analyst J. Derrick Wood kept his outperform rating on the company, noting Domo's robust billings, which could lead to a re-rating of the stock's multiple if it continues.

Wood, one of several analysts boosting their firm's share price targets, said Domo's "business is dramatically improving"and added that he is hearing of a very large deal in the pipeline that he does not think is in the company's guidance. 

Domo beat Wall Street's second-quarter estimates, posting total revenue of $51.1 million, up 23% from a year ago. Subscription revenue was $44.3 million, the company said, up 27% year over year.

Looking ahead, Domo said it expects third-quarter revenue between $51.2 million and $52.2 million. Full-year revenue is expected to be in the range of $202.5 million to $206.5 million.

Several other analysts also raised their price target on Domo's shares. Morgan Stanley's Sanjit Singh raised his price target to $41 from $33 after the company posted its "strongest quarter in well over a year." Singh keeps an equal weight rating on the shares as he contends that slower billings growth in the second half of this year point to ongoing uncertainty.

UBS analyst Jennifer Lowe raised her price target on Domo to $38 from $32, while keeping a neutral rating on the shares. The company posted "solid" results as billings topped consensus, she said, adding that Domo appears to have "found its footing" with greater consistency after some "execution missteps" in 2019.

Needham analyst Jack Andrews raised his price target on Domo to $61 from $47, while keeping a buy rating on the shares. 

Andrews said that Domo closed a notable amount of large deals within the quarter, while its management offered "encouraging" commentary regarding its path to cash flow breakeven.