Domo Shares Surge 16% After TD Cowen Upgrade to 'Buy'
Analyst cites accelerating growth from the company's strategic shift to consumption-based pricing and cloud partnerships.
Shares of Domo, Inc. (DOMO) surged more than 16% in morning trading after analysts at TD Cowen upgraded the business intelligence platform to 'Buy' from 'Hold', citing growing confidence in the company's strategic turnaround. The firm also raised its price target on the stock to $21 from $13.
The upgrade sent the stock soaring on heavy trading volume, which was running at more than 11 times the daily average. Investors reacted positively to the analyst's assertion that Domo is "turning the corner" on key initiatives expected to fuel sustained growth.
At the core of TD Cowen's bullish thesis are two major strategic shifts: the company's move toward a consumption-based pricing model and its expanding partnerships with cloud data warehouses (CDWs). This strategy is designed to better align Domo's revenue with customer usage and integrate its platform more deeply into the modern data infrastructure ecosystem. The firm highlighted recent enhancements to Domo's integration with Snowflake as evidence of progress in this area.
The upgrade comes amid a period of strong momentum for the Utah-based software company, whose shares have more than doubled in value since the beginning of the year. The latest rally pushed the stock close to its 52-week high of $16.69.
TD Cowen noted that growing investor demand for data infrastructure stocks, coupled with a limited supply of pure-play options, could position Domo as an "under the radar" opportunity. The new $21 price target suggests significant potential upside from its recent trading levels as the company's strategic initiatives are expected to yield results in the coming periods.