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DOMO Gears Up to Report Q3 Earnings: What's in the Cards?

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Domo (DOMO - Free Report) is set to report third-quarter fiscal 2021 results on Dec 3.

For the quarter, Domo expects revenues between $51.2 million and $52.2 million. Non-GAAP net loss is expected between 42 cents and 46 cents per share.

The Zacks Consensus Estimate for third-quarter loss has been steady at 44 cents per share over the past 30 days. The company had reported a loss of $1.05 in the year-ago quarter.

The consensus mark for revenues stands at $51.1 million, indicating an increase of 14.1% from the year-ago reported figure.

Notably, Domo beat the Zacks Consensus Estimate in the past four quarters, delivering an earnings surprise of 23.3%, on average.

Let’s see how things have shaped up for this announcement.

Domo, Inc. Price and EPS Surprise

Domo, Inc. Price and EPS Surprise

Domo, Inc. price-eps-surprise | Domo, Inc. Quote

Factors to Watch

Domo’s third-quarter results are expected to reflect resilient subscription-based business model amid the coronavirus pandemic.

Markedly, subscriptions increased 27% year over year and accounted for 87% of the company’s second-quarter revenues. The momentum is expected to have continued in the to-be-reported quarter.

Further, Domo’s expanding clientele, particularly enterprise customers, are expected to have driven the top line in the to-be-reported quarter. Additionally, the company’s expanding service offerings based on a solid partner base is a key catalyst. Notably, at the end of the second quarter, 60% of customers were on multi-year contracts.

Moreover, the third-quarter bottom line is expected to reflect benefits of planned cost reductions. Domo expects expect third-quarter adjusted net cash used in operation of over $4.5 million.

Key Q3 Developments

During the to-be-reported quarter, Domo announced that it has extended the maturity date of its $100 million term loan until April 2025, with no principal payments required until the new maturity date.

Additionally, Domo launched the Domo Election Tracker, a free, interactive resource with polling data and other relevant data sources ahead of this year’s presidential election held on Nov 3.

Moreover, Domo continued to win accolades in the to-be-reported quarter. The company was named a leader in the Dresner Advisory Services’ 2020 Wisdom of Crowds Industry Excellence Awards for the fourth consecutive year.

The awards reflect Domo’s growing popularity in the BI and analytics market.

What Our Model Indicates

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Domo has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering from the same sector as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:

Signet Jewelers Limited (SIG - Free Report) has an Earnings ESP of +13.95% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Toronto-Dominion Bank (TD - Free Report) has an Earnings ESP of +3.63% and holds a Zacks Rank of 2, at present.

Construction Partners, Inc. (ROAD - Free Report) has an Earnings ESP of +16.02% and carries a Zacks Rank of 2, currently.

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