Domo Shares Plunge on Weak Guidance and Leadership Transition

Domo US2575541055

Shares of data analytics provider Domo, Inc. experienced a severe sell-off on Friday, plummeting approximately 24 percent. The dramatic decline was triggered by the company's disappointing full-year forecast and a sudden, unexpected change in its executive leadership, announced alongside its quarterly results.

After the market closed on Thursday, Domo released its financial results for the third fiscal quarter. The company reported revenue of $79.4 million, which was largely in line with market expectations. Furthermore, it posted an adjusted earnings per share (EPS) of $0.01, significantly surpassing analyst forecasts.

However, this positive performance was completely eclipsed by a substantial downward revision to its annual guidance. For the full fiscal year 2026, Domo now anticipates an adjusted loss per share in the range of $0.09 to $0.13. This projection points to a larger deficit than the market had been anticipating.

The revenue forecast for the current fourth quarter also fell short. The company guided for Q4 revenue between $78.0 million and $79.0 million, which sits below the consensus estimates among Wall Street analysts. Management attributed the more cautious outlook to "longer and more complex sales cycles with partners," indicating challenges in closing deals.

Surprising CEO Shift Adds to Investor Jitters

Compounding the negative reaction to the financial guidance, Domo simultaneously announced a major shift in its leadership structure. Founder and Chief Executive Officer Joshua G. James is stepping back from his day-to-day operational duties due to health reasons. While he will retain the formal title of CEO, the role of interim chief executive and operational leader will be assumed by the company's former Chief Technology Officer, Daren Thayne.

This announcement, coming at a critical juncture for the company, introduced a significant element of uncertainty for investors. The market reacted sharply to the dual negative catalysts of weak forward-looking statements and a sudden leadership transition.

Analyst Community Cuts Price Targets

In response to the developments, several equity research firms moved to downgrade their assessments of Domo's stock.

• Analysts at TD Cowen reduced their price target from $21.00 to $16.00, citing "elongated deal closure timelines."
• Both Lake Street and DA Davidson also revised their targets downward, setting them at $13.00 per share.

Despite these reductions, a majority of covering analysts maintain a moderate "buy" or equivalent rating on the stock, though the average price target has been meaningfully lowered. From a technical analysis perspective, the steep single-day decline pushed the shares deeply into oversold territory, leaving them trading well below key moving averages.

The next major test for Domo will be the release of its fourth-quarter and full fiscal year 2026 results. Market participants will be closely monitoring for any signs of stabilization in the company's sales cycles and for strategic clarity under its new interim leadership framework.