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OneSpan Inc (OSPN)
NASDAQ:OSPN
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OneSpan
(NASDAQ:OSPN)
71Outperform
OneSpan (OSPN) vs. S&P 500 (SPY)
Market Cap
$590.20M
Dividend Yield0.78%
Average Volume (3M)447.84K
Price to Earnings (P/E)10.6
Beta (1Y)1.56
Revenue Growth3.43%
EPS GrowthN/A
CountryUS
Employees571
SectorTechnology
Sector Strength44
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)1.45
Shares Outstanding38,175,820
10 Day Avg. Volume392,371
30 Day Avg. Volume447,840
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.52
Price to Cash Flow (P/CF)12.30
P/FCF Ratio12.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$19.33Price Target Upside26.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
OneSpan Business Overview & Revenue Model
Company DescriptionOneSpan Inc., together with its subsidiaries, designs, develops, and markets digital solutions for identity, security, and business productivity worldwide. The company offers OneSpan Sign, a range of e-signature requirements for occasional agreement to processing tens of thousands of transactions; OneSpan Cloud Authentication, a cloud-based multifactor authentication solution that supports a range of authentication options, including biometrics, push notification, and visual cryptograms for transaction data signing, SMS, and hardware authenticators; and OneSpan Identity Verification, which enables banks and financial institutions identity verification services. It also provides Mobile Security Suite, a software development kit; Mobile Authenticator Studio, a mobile authenticator that operates as a discrete mobile application; and authentication servers, which enables customers to administer a high level of access control. In addition, it offers Trusted Identity Platform, a cloud platform that simplify and secure user journeys; Intelligent Adaptive Authentication; and Risk Analytics, a comprehensive anti-fraud solution. It sells its solutions through its direct sales force, as well as through distributors, resellers, systems integrators, and original equipment manufacturers. The company was formerly known as VASCO Data Security International, Inc. and changed its name to OneSpan Inc. in May 2018. OneSpan Inc. was founded in 1991 and is headquartered in Chicago, Illinois. OneSpan Inc. was a former subsidiary of Guidewire Software, Inc.
How the Company Makes MoneyOneSpan makes money through the sale of its software solutions, which are designed to enhance security and prevent fraud. The company's revenue model includes licensing fees for its software products, subscription-based services, and maintenance and support contracts. Key revenue streams include its authentication solutions, which are used by financial institutions to secure online banking and payment transactions, and its e-signature solutions, which facilitate secure digital document signing. Additionally, OneSpan partners with technology providers and system integrators to expand its market reach and enhance its product offerings, contributing to its earnings.
OneSpan Financial Statement Overview
Summary
OneSpan's financial performance shows promising growth with improved profitability and cash flow generation. The company benefits from low leverage, which enhances financial stability. However, there is potential for improvement in equity utilization and cash flow conversion from profits.Income Statement
OneSpan's revenue grew by 3.43% from 2023 to 2024, indicating positive growth. Gross profit margin improved to 71.82%, and net profit margin turned positive to 23.47% from a loss, reflecting a strong turnaround in profitability. The EBIT and EBITDA margins also improved significantly, suggesting enhanced operational efficiency.75
Positive
Balance Sheet
The company has a low debt-to-equity ratio of 0.03, indicating low financial leverage, which is a positive sign for stability. The return on equity improved to 26.86%, showing effective utilization of equity. However, the equity ratio decreased to 62.75%, indicating a slight reduction in reliance on equity financing.70
Positive
Cash Flow
Free cash flow improved significantly, marking a positive trend in cash generation. The operating cash flow to net income ratio is 0.98, indicating efficient cash conversion. However, the free cash flow to net income ratio is 0.81, suggesting room for improvement in translating profits into free cash flow.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 243.18M | 235.11M | 219.01M | 214.48M | 215.69M | Gross Profit |
| 174.58M | 157.72M | 148.57M | 142.94M | 152.25M | EBIT |
| 44.80M | -28.87M | -495.00K | -26.13M | -5.26M | EBITDA |
| 57.61M | -5.08M | -6.74M | -17.20M | 6.75M | Net Income Common Stockholders |
| 57.08M | -29.80M | -14.43M | -30.58M | -5.46M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 83.16M | 42.49M | 98.83M | 98.49M | 115.25M | Total Assets |
| 338.73M | 289.19M | 335.08M | 342.27M | 375.20M | Total Debt |
| 6.93M | 6.82M | 8.44M | 10.18M | 12.40M | Net Debt |
| -76.23M | -35.67M | -88.06M | -53.20M | -76.00M | Total Liabilities |
| 126.20M | 130.05M | 131.77M | 122.49M | 117.86M | Stockholders Equity |
| 212.53M | 159.14M | 203.31M | 219.78M | 257.34M |
| Cash Flow | Free Cash Flow | |||
| 46.42M | -23.28M | -10.81M | -4.95M | 11.82M | Operating Cash Flow |
| 55.67M | -10.73M | -5.79M | -2.75M | 14.92M | Investing Cash Flow |
| -9.30M | -12.01M | 46.59M | -10.98M | -4.66M | Financing Cash Flow |
| -5.24M | -32.09M | -7.31M | -10.39M | -7.06M |
OneSpan Technical Analysis
Negative
15.25
Price Trends
17.60
Negative
17.85
Negative
16.21
Negative
Market Momentum
-0.49
Negative
36.03
Neutral
18.17
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OSPN, the sentiment is Negative. The current price of 15.25 is below the 20-day moving average (MA) of 16.04, below the 50-day MA of 17.60, and below the 200-day MA of 16.21, indicating a bearish trend. The MACD of -0.49 indicates Negative momentum. The RSI at 36.03 is Neutral, neither overbought nor oversold. The STOCH value of 18.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OSPN.
OneSpan Risk Analysis
OneSpan disclosed 42 risk factors in its most recent earnings report. OneSpan reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
OneSpan Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $4.64B | 27.33 | 41.09% | ― | 10.40% | 14.78% | |
71 Outperform | $590.20M | 10.59 | 30.72% | 0.78% | 3.43% | ― | |
70 Outperform | $74.28B | 42.59 | 338.74% | ― | 12.27% | 54.69% | |
67 Neutral | $16.61B | 1,777.39 | -5.91% | ― | 33.10% | -20.31% | |
63 Neutral | $4.20B | ― | -9.73% | ― | 12.68% | 54.80% | |
57 Neutral | $20.97B | 10.32 | -14.01% | 2.49% | 4.46% | -23.38% | |
56 Neutral | $4.69B | ― | -20.26% | ― | 10.38% | 6.88% |
* Technology Sector Average
Performance Comparison
OSPN
OneSpan
15.25
3.61
31.01%
FTNT
Fortinet
96.26
28.44
41.93%
QLYS
Qualys
125.93
-41.35
-24.72%
VRNS
Varonis Systems
40.45
-6.36
-13.59%
CYBR
CyberArk Software
338.00
73.75
27.91%
TENB
Tenable Holdings
34.98
-14.36
-29.10%
OneSpan Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -5.98% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong profitability and cash generation, highlighted by record high adjusted EBITDA and significant growth in subscription revenues. However, the call also acknowledged challenges with declining hardware revenue and the impact of sunsetting products. Despite these challenges, the company's strategic shift towards higher-margin software and subscription revenue, along with the introduction of dividends, suggests a positive outlook.Highlights
Record High Adjusted EBITDA
Achieved record high adjusted EBITDA in Q4 2024 at $20 million, or 32% of revenue, and $73 million for the full year, or 30% of revenue.
Subscription Revenue Growth
Subscription revenue grew over 30% for both the quarter and the year, accounting for 57% of total revenue, a 12 percentage point increase year-over-year.
Cash Generation Improvement
Generated $56 million in cash from operations in 2024, a significant improvement from the prior year's use of $11 million.
Security Subscription Revenue Surge
Security subscription revenue increased 49% in Q4 and 33% for the full year 2024.
Dividend Introduction
Paid the first quarterly cash dividend in OneSpan's history, with plans to continue quarterly dividend payments.
Lowlights
Total Revenue Decline in Q4
Total revenue declined 3% in the fourth quarter, primarily due to expected declines in hardware revenue.
Continued Decline in Hardware Revenue
Hardware revenues declined 36% in Q4 and 23% for the full year 2024, with expectations of continued decline into 2025.
Impact of End-of-Life Products
ARR growth was negatively impacted by churn related to end-of-life products, with a $3 million revenue impact in Digital Agreements for full year 2024.
Company Guidance
During the Q4 2024 earnings call, OneSpan provided several key financial metrics and guidance for the year. The company reported record high adjusted EBITDA of $20 million, representing 32% of revenue for the fourth quarter, and $73 million or 30% of revenue for the full year 2024. The annual recurring revenue (ARR) increased by 8.5% to $168 million, with Digital Agreements and Security segments growing by 12% and 6%, respectively. Subscription revenue experienced over 30% growth both quarterly and annually, accounting for 57% of total revenue, up by 12 percentage points year-over-year. Although total revenue declined by 3% in Q4, it grew by 3% for the year, with software and services revenue increasing 16% and comprising nearly three-quarters of total revenue. The company generated $12 million in cash from operations during Q4 and $56 million for the year, a significant improvement from the previous year. For 2025, OneSpan anticipates revenue between $245 million to $251 million, ARR from $180 million to $186 million, and adjusted EBITDA ranging from $72 million to $76 million, with expectations of double-digit subscription revenue growth.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.