Domo Stock Ready for the Next Leg Up

Business intelligence analytics provider Domo, Inc. NASDAQ: DOMO stock is pressing for another leg higher on the heels of impressive earnings results. The Company provides easy-to-use business intelligence analytics utilizing artificial intelligence (AI) to visualize organizational data analytics. It specifically provides insights and intelligence via mobile and cloud. As with most business intelligence (BI) platforms, the end goal is to enable better decision-making after the software/platform does the heavy data crunching. The Company focuses on small-medium-sized business (SMBs) but boasts an impressive client list including household Fortune 100 companies like Amazon NASDAQ: AMZN, Cisco Systems NASDAQ: CSCO and ESPN NYSE: DIS in addition to over 1,800 companies. The software enables companies to integrate almost any data source to one single source of truth platform providing complete visual data analytics conveniently on the cloud and accessible by mobile and remote. The Company is also partnered with Amazon and won the AWS Retail Competency status which will enable AWS customers to integrate the Domo platform. Additionally, it is also partnered with Snowflake NASDAQ: SNOW through its Partner Connect program. Prudent investors seeking a niche play in the BI segment can watch for opportunistic pullbacks.

Q1 Fiscal 2022 Earnings Release

On May 27, 2021, Domo reported its fiscal Q1 2022 results for the quarter ending April 2021. The Company reported an earnings-per-share (EPS) loss of (-$0.26) versus consensus analyst estimates for a loss of  (-$0.44), an $0.18 beat. Revenues grew 23.7% year-over-year (YoY) to $60.1 million, beating analyst estimates for $57.24 million. Subscription revenues rose 23% YoY to $52.1 million while billings grew 25% YoY to $58.2 million. The remaining performance obligations (RPO) rose 24% YoY to $284.3 million. Non-GAAP subscription gross margin was 83%, up 4% YoY. Cash and cash equivalents was $84.8 million at the end of the Q. Domo CEO Josh James stated, “With a record Q1 across many metrics including new business and retention, our performance this quarter puts us in a great position to execute well for the remainder of FY22.”

Upping Q2 Fiscal 2022 and Full-Year 2022 Guidance

Domo raised its fiscal Q2 2022 EPS guidance to a range between (-$0.39) to (-$0.35) versus (-$0.40) consensus analyst estimates. The Company raised Q2 fiscal 2022 revenues guidance to come in between $60 million to $61 million versus $59.36 million analyst estimates. For full-year fiscal 2022, the Company expects EPS loss between (-$1.41) to (-$1.33) versus (-$1.55) consensus analyst estimates on revenues between $246 million to $252 million versus $244.17 million analyst expectations.

Conference Call Takeaways

CEO Josh Jones set the tone, “We posted 25% billings growth, 23% subscription revenue growth, and 24% total revenue growth, with a 90% plus retention rate across both enterprise and corporate segments of our business in every geography.” He continued, “Now for those of you who know me, you know that I’m not generally known as an infinitely patient, unendingly understanding, not-demanding kind of guy. So, you can appreciated that it’s very hard to be patient long enough to wait for all the characterizations to catch up with reality. And obviously, I’m saying that a bit in jest, but with what we have consistently producing, I think it’s important to do some math that calls out how strong and consistent our performance has actually been.” CEO Jones went on a diatribe about the unfair characterization of the Company growth and ranted for most of his session. He spoke of a “tipping point” for Domo would come from an “instantly recognizable brand” that adopts Domo and is driving “fantastic” ROI on their investment. He went on inferring that the Company deserves more respect from analysts. He also outlines some performance awards the Company received in addition to the AWS certification which should be a future growth driver. The diatribe was not the typical data driven talk about strategy and growth drivers but more of a Jerry Maguire monologue about how the BI industry should operate and his expectations.  

DOMO Opportunistic Pullback Levels

Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for DOMO stock. The weekly rifle chart peaked off the $79.06 Fibonacci (fib) level and sold off under $52 before coiling back up. The weekly rifle chart has been in a compressed range during the stochastic oscillation down. The weekly 5-period moving average (MA) is rising at the $65.13 after breaking out through the 15-period MA at $62.39. The weekly triggered the market structure low (MSL) on the breakout out through the $70 trigger powered by the weekly stochastic mini pup. The weekly upper Bollinger Bands point to $76.42. The daily rifle chart is uptrending with a rising 5-period MA support at $70.28 and 15-period MA rising at $66.69. The weekly formed a market structure high (MSH) sell trigger on a breakdown below the $64.67. The daily stochastic has a mini pup which targets the upper BBs at $70.28. Patient investors can watch for opportunistic pullback levels at the $68.95 fib, $66.17 fib, $63.55 fib, $60.35 fib, $57.73 fib, $53.88 fib, and the $52.88 fib. Upside trajectories range from the $84.02 fib up to the $99.92 fib level.