ON24 (ONTF) AI Stock Analysis

• Market Cap: $194.70M
• Dividend Yield: N/A
• Average Volume (3M): 160.44K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.92
• Revenue Growth: -9.55%
• EPS Growth: 12.28%
• Country: US
• Employees: 437
• Sector: Technology
• Sector Strength: 45
• Industry: Software - Application
• EPS (TTM): -1.01
• Shares Outstanding: 42,325,214
• 10 Day Avg. Volume: 137,704
• 30 Day Avg. Volume: 160,443
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.57
• Price to Cash Flow (P/CF): 58.90
• P/FCF Ratio: 136.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $7.50
• Price Target Upside: 64.47% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

ON24's stock score is primarily impacted by its financial performance, which shows a strong balance sheet but ongoing profitability issues. Technical analysis indicates bearish momentum, and valuation metrics are weak due to negative earnings. The earnings call presents both opportunities and challenges, with some positive developments offset by revenue and ARR declines.

Positive Factors

AI Initiatives

AI initiatives continue to play a key role in driving growth, as customers increasingly turn to the solution to enable enhanced personalization and content creation, ultimately boosting engagement.

Customer Retention

ON24 continues to win back customers that churned, with many returning to sign multiyear contracts.

Financial Performance

ON24 posted a typical quarter with a moderate revenue beat and solid upside on profitability.

Negative Factors

ARR Decline

Core ARR still declined both sequentially and year-over-year, indicating challenges in achieving growth.

Growth Challenges

The path to sustained growth remains unclear and may take several quarters to play out.

Market Competition

ON24 is a premium priced product in an area where marketing budgets are still tight and there are lower-cost, good-enough alternatives in the market.

ON24 Business Overview & Revenue Model

Company Description

ON24, Inc. provides a cloud-based digital experience platform that enables businesses to convert customer engagement into revenue through interactive webinar, virtual event, and multimedia content experiences worldwide. The company provides ON24 Experience products, such as ON24 Elite, a live and interactive webinar experience; ON24 Breakouts, a live breakout room experience that facilitates networking, collaboration and interactivity between users; ON24 Go Live, a live, interactive video event experience that enables presenters and attendees to engage face-to-face in real-time; ON24 Virtual Confrence, a live and large scale virtual event experience; ON24 Engagement Hub, a rich multimedia content experience; and ON24 Target, a personalized and curated rich multimedia content experience, as well as solutions; ON24 Intelligence, an analytics backbone that captures first-person data to power the insights, benchmarking, reporting, and artificial intelligence and machine learning engine; and ON24 Connect, an ecosystem of third-party application integrations. It also offers professional services, such as experience management, monitoring, premium support, and implementation and other services. The company sells its products through direct sales. It serves technology, financial services, healthcare, industrial and manufacturing, professional services, and business-to-business information service industries. The company was formerly known as NewsDirect, Inc. and changed its name to ON24, Inc. in December 1998. The company was incorporated in 1998 and is headquartered in San Francisco, California.

How the Company Makes Money

ON24 generates revenue primarily through subscriptions to its digital experience platform. The company offers a range of pricing plans based on the number of users, the features required, and the scale of the virtual events. These subscriptions typically involve multi-year agreements, providing ON24 with a recurring revenue stream. Additionally, ON24 may earn revenue from professional services offered to help clients optimize their use of the platform and from strategic partnerships that enhance the platform's capabilities and reach.

ON24 Financial Statement Overview

Summary

ON24 demonstrates a strong balance sheet with low leverage, but the company is struggling with profitability as reflected in its income statement. The improvement in cash flow is a positive development, though the company needs to address its revenue and profit decline to enhance financial stability and performance.

Income Statement

ON24's revenue has been declining, with a notable decrease from 2023 to TTM (Trailing-Twelve-Months). The gross profit margin remains relatively stable but the net profit margin is negative due to sustained net losses. The company faces challenges in achieving EBIT and EBITDA profitability, indicating ongoing operational inefficiencies.

Balance Sheet

ON24 maintains a strong equity position with a low debt-to-equity ratio, indicating a conservative use of leverage. However, the return on equity is negative due to ongoing net losses. The equity ratio is robust, reflecting a strong asset base relative to liabilities.

Cash Flow

The company has improved its free cash flow position recently, but the growth is from a low base. Operating cash flow has turned positive in the TTM, which is a positive sign, but the free cash flow to net income ratio remains weak due to persistent losses.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
148.08M	163.71M	190.87M	203.61M	156.94M
	Gross Profit
110.07M	119.48M	138.09M	156.25M	123.61M
	EBIT
-50.66M	-54.14M	-59.58M	-23.59M	21.84M
	EBITDA
-36.66M	-45.34M	-49.69M	-19.48M	24.89M
	Net Income Common Stockholders
-42.16M	-51.79M	-58.21M	-24.26M	20.75M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
182.74M	198.71M	328.12M	382.56M	61.24M
	Total Assets
250.95M	280.30M	425.47M	480.49M	156.72M
	Total Debt
3.39M	5.39M	9.33M	3.99M	28.09M
	Net Debt
-11.54M	-47.82M	-17.66M	-160.95M	-30.16M
	Total Liabilities
91.54M	100.08M	117.51M	125.40M	146.52M
	Stockholders Equity
159.41M	180.22M	307.96M	355.09M	10.20M
Cash Flow		Free Cash Flow
2.56M	-14.38M	-24.16M	1.63M	36.51M
	Operating Cash Flow
4.81M	-12.20M	-20.46M	5.19M	37.54M
	Investing Cash Flow
-19.45M	162.31M	-88.98M	-219.19M	970.00K
	Financing Cash Flow
-23.27M	-124.18M	-28.62M	320.51M	804.00K

ON24 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.56
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ONTF, the sentiment is Negative. The current price of 4.56 is below the 20-day moving average (MA) of 4.85, below the 50-day MA of 5.47, and below the 200-day MA of 6.15, indicating a bearish trend. The MACD of -0.27 indicates Negative momentum. The RSI at 39.03 is Neutral, neither overbought nor oversold. The STOCH value of 49.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ONTF.

ON24 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	59 Neutral	$10.59B	10.09	-6.37%	3.05%	7.44%	-10.67%
IMMR	56 Neutral	$231.63M	2.74	35.11%	2.38%	3828.94%	129.01%
EB	56 Neutral	$199.67M	―	-8.60%	―	-0.33%	38.78%
EGHT	51 Neutral	$230.46M	―	-40.78%	―	-2.23%	19.48%
ONTF	48 Neutral	$194.70M	―	-24.82%	―	-9.55%	12.28%
LAW	46 Neutral	$209.53M	―	-32.07%	―	4.89%	-31.44%