Domo's 23% Plunge: CEO Health Drama and Earnings Woes Spark Turbulence

Summary
• Domo CEO Joshua James reduces duties for health reasons, naming Daren Thayne as interim principal executive officer
• Stock plummets 22.9% intraday to $8.92, hitting a 52-week low of $6.01
• Q3 revenue flat at $79.4M, adjusted EPS beats estimates but Q4 guidance falls short

Domo’s shares have imploded on a perfect storm of leadership uncertainty and underwhelming earnings. The stock’s 22.9% drop—a $2.65 plunge from its $9.305 open—has pushed it to a 52-week low. With CEO health concerns and tepid guidance dominating headlines, traders are scrambling to parse the fallout from a leadership reshuffle and a revenue stall in a sector where Microsoft’s -0.12% drag hints at broader software sector fragility.

CEO Health Concerns and Earnings Disappointment Fuel Domo's Sharp Decline
Domo’s 22.9% collapse stems from two interlocking catalysts: a leadership crisis and earnings underperformance. CEO Joshua James’ decision to reduce duties for health reasons has triggered immediate investor unease, with Daren Thayne stepping in as interim principal executive officer. This abrupt shift raises questions about operational continuity and strategic direction. Compounding the issue, Q3 results revealed flat revenue at $79.4M—matching Wall Street’s estimates but failing to show growth—and a Q4 revenue forecast of $78.5M that fell 0.9% below expectations. While adjusted EPS of $0.01 beat estimates, the company slashed full-year adjusted EPS guidance by 160%, signaling deteriorating profitability. The market’s reaction reflects a loss of confidence in both leadership and business fundamentals.

Application Software Sector Suffers as Microsoft Trails 0.12%
Domo’s collapse aligns with broader software sector weakness. Microsoft, the sector’s bellwether, fell 0.12% on the day, reflecting cautious sentiment toward enterprise software stocks. While Domo’s drop is more severe, the sector’s struggles are evident in recent headlines: Adobe’s $74% Semrush rally and Oracle’s debt concerns highlight divergent performance. Domo’s flat billings and negative CAC payback period underscore its inability to compete with peers leveraging AI-driven differentiation. The sector’s focus on AI integration—exemplified by Intuit’s ChatGPT partnership—contrasts sharply with Domo’s stagnant growth and leadership turmoil.

Options Playbook: Capitalizing on Domo's Volatility with Strategic Puts and Calls
• RSI: 37.38 (oversold)
• MACD: -0.558 (bearish), Signal Line: -0.637
• Bollinger Bands: Upper $13.38, Middle $11.83, Lower $10.29
• 200D MA: $12.18 (above current price)

Domo’s technicals paint a picture of oversold conditions and bearish momentum. The stock is trading near its 52-week low and below all major moving averages, with RSI at 37.38 suggesting potential for a rebound. However, the MACD histogram’s negative value and the 200-day average acting as resistance indicate a high probability of continued downward pressure. Traders should monitor the $10.29 lower Bollinger Band as a critical support level.

Top Option 1: DOMO20251219P8
• Type: Put
• Strike Price: $8
• Expiration: 2025-12-19
• IV: 53.27% (elevated)
• Leverage Ratio: 87.50% (high)
• Delta: -0.184 (moderate bearishness)
• Theta: -0.0037 (slow time decay)
• Gamma: 0.2817 (high sensitivity to price moves)
• Turnover: 222 (liquid)

This put option offers aggressive leverage with a 87.50% leverage ratio and 53.27% implied volatility, making it ideal for a 5% downside scenario. A 5% drop to $8.47 would yield a payoff of $0.47 per contract, with high gamma ensuring responsiveness to price swings. The moderate delta balances risk and reward.

Top Option 2: DOMO20260220P9
• Type: Put
• Strike Price: $9
• Expiration: 2026-02-20
• IV: 62.33% (high)
• Leverage Ratio: 7.95% (moderate)
• Delta: -0.469 (strong bearishness)
• Theta: -0.0037 (slow decay)
• Gamma: 0.1578 (moderate sensitivity)
• Turnover: 38,500 (high liquidity)

This longer-dated put provides a safer play with 62.33% IV and 38,500 turnover. A 5% drop would generate a $0.53 payoff, with the -0.469 delta offering robust downside protection. The high IV and liquidity make it a strategic choice for a bearish outlook.

Action Insight: Aggressive bears should prioritize DOMO20251219P8 for short-term volatility, while DOMO20260220P9 suits a more conservative, longer-term bearish stance. Both contracts capitalize on Domo’s oversold RSI and bearish MACD, with the latter offering added time decay protection.

Backtest Domo Stock Performance
I’ve started building the back-test framework you requested, but I ran into one data-coverage gap that prevents a fully reliable result:Key data missing • To identify a “-23 % intraday plunge”, we need an intraday low price (or at least the daily low) versus the previous session’s close. • The dataset returned by the ticker-indicator query only contains derived indicators (MA, EMA, MACD, etc.) and does not include the raw OHLC fields. • Without the low price, it is impossible to flag days whose intraday drawdown reached –23 %.How we can proceed Option 1 – Use daily low as a proxy  If you are comfortable approximating “intraday plunge” with “(daily low – prior close)/prior close ≤ –23 %”, I can pull DOMO’s full daily OHLC series and rerun the event detection & strategy back-test automatically.  This will still be reasonably robust, although it will miss plunges that recovered before the close if the daily low was not recorded at the close.Option 2 – Provide actual intraday data  If you have (or can point me to) one-minute / five-minute intraday bars, I can ingest that and flag precise plunges.Please let me know which route you prefer, and I’ll complete the analysis accordingly (including refreshed performance metrics, visual P&L curve, drawdown chart, etc.).

Domo at a Crossroads: Strategic Entry Points Emerge Amid Sector Uncertainty
Domo’s 22.9% plunge has created a high-risk, high-reward scenario. While the stock’s oversold RSI and bearish MACD suggest a potential rebound, the CEO’s health concerns and flat revenue growth cast a long shadow. Traders must weigh the risks of leadership instability against the sector’s broader struggles—exemplified by Microsoft’s -0.12% drag. For those with a bearish bias, the DOMO20251219P8 and DOMO20260220P9 options offer compelling leverage and liquidity. However, a critical test looms: if Domo breaks below its $10.29 lower Bollinger Band, the bearish case strengthens. Investors should also monitor Microsoft’s performance as a sector barometer. Act now: Position for a potential rebound with tight stops or capitalize on the bearish case with the highlighted puts—either way, Domo’s volatility demands a strategic, data-driven approach.