Stock Analysis

Insider Buying: The Domo, Inc. (NASDAQ:DOMO) Independent Director Just Bought 226% More Shares

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Domo, Inc. (NASDAQ:DOMO) shareholders (or potential shareholders) will be happy to see that the Independent Director, John Pestana, recently bought a whopping US$991k worth of stock, at a price of US$13.68. That increased their holding by a full 226%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.

Check out our latest analysis for Domo

Domo Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Founder, Joshua James, sold US$1.6m worth of shares at a price of US$15.11 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$12.31). So it is hard to draw any strong conclusion from it.

Over the last year we saw more insider selling of Domo shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NasdaqGM:DOMO Insider Trading Volume March 17th 2023

I will like Domo better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Domo insiders own about US$57m worth of shares. That equates to 13% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Domo Tell Us?

The recent insider purchase is heartening. On the other hand the transaction history, over the last year, isn't so positive. While recent transactions indicate confidence in Domo, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. So they seem pretty well aligned, overall. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 4 warning signs for Domo (1 is a bit unpleasant!) that we believe deserve your full attention.

But note: Domo may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

What are the risks and opportunities for Domo?

Domo, Inc. operates a cloud-based business intelligence platform in the United States, Japan, and internationally.

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  • Trading at 35.7% below our estimate of its fair value

  • Revenue is forecast to grow 7.72% per year


  • Negative shareholders equity

  • Shareholders have been diluted in the past year

  • Volatile share price over the past 3 months

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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