Data Company Domo Inc is Seeing Significant Insider Buying

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Research on insider transaction activity shows that insiders at small firms tend to earn greater profits from their stock purchases than insiders at large firms. One reason for this is that smaller companies don’t have as many analysts covering them.

In this report, we are going to highlight insider buying at a small US-listed company, Domo Inc (DOMOS:US). Domo offers a cloud-native data experience platform that helps companies use their data more effectively. Its clients include eBay, Unilever, NBA, and Cisco. The company is listed on the Nasdaq and currently has a market cap of around $623.1 million.

Significant Insider Buying

Our data shows that since the beginning of March, four insiders have made large stock purchases here. Those who have bought shares include:

  • Independent Director Daniel Daniel ($1.7 million worth of stock)

  • CFO David Jolley ($70K worth of stock)

  • Founder and CEO Josh James ($6.1 million worth of stock)

  • Director John Pestana ($991.4K worth of stock)

 Combined, the four insiders have invested around $8.8 million in the company.

Top-level Insiders

There are some notable insider purchases here.

The buying activity from Founder and CEO Josh James looks particularly interesting, in our view. Prior to founding Domo in 2010, Mr James served as CEO of Omniture, a SaaS-based web analytics company that he co-founded in 1996 and took public in 2006. In 2009, Mr. James facilitated Omniture’s sale to Adobe for $1.8 billion.

Recent purchases from board member Daniel Daniel are also worth flagging. Mr. Daniel is a portfolio manager at Twenty Acre Capital. Previously, he worked in investment roles at BlackRock and UBS. Given his background, he is likely to have a good understanding of the investment potential here.

Solid Growth 

Domo recently posted a solid set of Q1 results.

For the period, revenue came in at $79.5 million, an increase of 7% year over year, with subscription revenue up 10% year over year. Net loss amounted to $24.4 million versus $32.9 million a year earlier.

During the quarter, the company was named as the number one vendor in Dresner Advisory Services' 2023 Cloud Computing and Business Intelligence Market Study for the seventh consecutive year. It was also named a Leader in Nucleus Research's 2023 Analytics Technology Value Matrix.

Looking ahead, management was confident in relation to the outlook for the company. “A relentless focus on customers is central to our plan to return to growth, and the feedback is extremely positive as we build momentum with businesses around the world. We have the right product, market opportunity and sales capacity to grow, and I am very confident in our future,” said Mr. James.

In light of this confidence from management, we see the insider buying as a bullish development.