Domo (DOMO) Stock Forecast & Price Target

Domo Inc. has demonstrated strong financial momentum, evidenced by a long-term subscription remaining performance obligation (RPO) of $189.6 million, reflecting a significant year-over-year increase of 44.1%, which showcases the company's growing customer loyalty and multi-year contract commitments. Additionally, a notable rise in subscription RPO by 19.5% year-over-year to $409.8 million reinforces the firm’s robust subscription model and retention capabilities, with expectations of improvements in the gross retention rate projected to rise above the current 85% by year-end. Furthermore, Domo’s operational performance is highlighted by an operating income of $6.1 million, far exceeding market expectations, which signals effective cost management and operational efficiency.

Domo Inc faces a challenging outlook as subscription revenue is projected to decline sequentially, deviating from its historical trend of consistent sequential growth. Additionally, potential issues such as low retention rates, increased competition, and difficulties in expanding within existing contracts could hinder the company's ability to sustain long-term profitability in a rapidly evolving business intelligence market. The presence of substantial net operating loss carryforwards, while potentially advantageous for buyers, underscores ongoing financial struggles and an uncertain transition within its product ecosystem.