Domo's shares experienced a significant surge, climbing over 16% in value, on today's market.
Domo's Price Target Soars as TD Cowen Analyst Upgrades Stock
In a significant move, Derrick Wood, an analyst at TD Cowen, has upgraded Domo's stock from a hold to a buy, setting a new price target of $21 per share. This represents an increase of almost 62% from the previous $13.
The upgrade comes just one day before Domo is scheduled to publish its latest quarterly earnings. The change in pricing strategy is expected to increase both adoption and the company's potential for monetizing its services, according to Derrick Wood.
The pundit's view is that Domo could potentially maintain its momentum based on its Q1 performance. In its Q1 figures, published in May, Domo showed several encouraging developments, including a narrowed net loss and a 24% increase in remaining performance obligations (RPOs).
Despite the basically flat year-over-year revenue in Q1, Domo reported a steep increase in RPOs. This suggests that the company is securing more long-term commitments from its subscribers.
Derrick Wood is particularly bullish on Domo's move from per-seat to consumption-based pricing. He believes this shift will spur growth at Domo.
The analyst's upgrade has had a positive impact on Domo's share price. Following the upgrade, Domo's share price increased by more than 16%.
The pundit considers Domo a sleeper stock in the limited pool of next-generation data and infrastructure titles on the market. The analyst believes that investors are increasingly eager to own such stocks, but there are not many listed on U.S. exchanges at present.
It's worth noting that on the same day, the S&P 500 index increased by 0.4%, while Domo's performance was significantly better.
The company, Domo, is set to publish its Q2 figures for fiscal 2026 after market hours on Wednesday. These figures will provide further insights into the company's performance and growth prospects.
In conclusion, the upgrade by Derrick Wood of TD Cowen has given a boost to Domo's stock, reflecting positive expectations around the company's earnings and growth prospects.
