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Onespan (OSPN)
NASDAQ:OSPN
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OneSpan
(NASDAQ:OSPN)
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Rating:71Outperform
Price Target:
$14.50
▲(16.28% Upside)
OneSpan's overall stock score reflects strong financial performance and attractive valuation, which are offset by bearish technical indicators and challenges highlighted in the earnings call. The company's robust profitability and strategic initiatives in the software sector are positive, but short-term growth concerns and technical weakness weigh on the score.
Positive Factors
Software Business Growth
The strong growth in the software segment, which constitutes the majority of the business, indicates a successful shift towards high-margin, recurring revenue streams, enhancing long-term stability and profitability.
Strategic Acquisitions
Acquisitions and investments in complementary technologies enhance product offerings and market competitiveness, supporting long-term growth and innovation.
Cash Generation
Strong cash generation and EBITDA performance provide financial flexibility for strategic investments and shareholder returns, bolstering long-term financial health.
Negative Factors
Revised Revenue Guidance
The downward revision in revenue guidance reflects potential challenges in achieving growth targets, which could impact investor confidence and strategic planning.
Decline in Hardware Revenue
The decline in hardware revenue highlights a shift in market demand, necessitating adaptation and potential restructuring to maintain overall revenue growth.
Reduced GAAP Operating Income
The reduction in operating income due to higher expenses may pressure margins and profitability, requiring cost management to sustain long-term financial performance.
OneSpan (OSPN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$483.71M
Dividend Yield3.75%
Average Volume (3M)512.99K
Price to Earnings (P/E)8.6
Beta (1Y)1.06
Revenue Growth-1.43%
EPS Growth101.80%
CountryUS
Employees465
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.33
Shares Outstanding38,027,122
10 Day Avg. Volume360,401
30 Day Avg. Volume512,987
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)3.35
Price to Sales (P/S)2.93
P/FCF Ratio15.33
Enterprise Value/Market Cap1.11
Enterprise Value/Revenue2.23
Enterprise Value/Gross Profit3.02
Enterprise Value/Ebitda9.06
Forecast
1Y Price Target
$18.50Price Target Upside48.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)1.42
Revenue Forecast (FY)$244.75M
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 generates revenue through a combination of software licensing, subscription services, and professional services. Its primary revenue streams come from the sale of its authentication and e-signature products, which can be licensed on a one-time basis or through recurring subscription models. Additionally, the company offers professional services, including implementation and support, which contribute to its earnings. Significant partnerships with financial institutions and technology providers enhance its market reach and provide steady revenue through integrated solutions. The demand for secure digital transactions and compliance with regulatory standards further drives OneSpan's growth and profitability.
OneSpan Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong growth in the software business and successful strategic acquisitions and investments, which position the company for future growth. However, the call also revealed challenges, including a decline in hardware revenue and revised revenue guidance. While profitability and cash generation remain strong, concerns about growth prospects in the short term were evident.Q3-2025 Updates
Positive Updates
Strong Software Business Growth
The software business, which now accounts for over 80% of the overall business, delivered double-digit subscription revenue growth and ARR growth.
Successful Acquisition and Strategic Investments
Completed the acquisition of Nok Nok and a strategic investment in ThreatFabric, funded by cash generated by the business. Nok Nok has already closed two new logos, generating additional pipeline for Q4.
Record Adjusted EBITDA and Cash Generation
Generated record adjusted EBITDA of $58 million (32% of revenue) and $47 million in cash from operations over the first 9 months.
Digital Agreements Business Performance
Digital agreements business grew subscription revenue by 11% year-over-year and delivered record high segment operating income.
Return of Capital to Shareholders
Returned more than $20 million to shareholders through share repurchases and dividends in the first 9 months of 2025.
Negative Updates
Revised Revenue and ARR Guidance
Full-year 2025 revenue guidance revised down to $239-$241 million from $245-$251 million. ARR guidance adjusted to $183-$187 million from a previous range of $186-$192 million.
Decline in Hardware Revenue
Hardware revenue declined due to a shift towards mobile-first authentication, accounting for less than 20% of the business.
Reduced GAAP Operating Income
GAAP operating income decreased to $8.2 million in Q3 2025, compared to $11.3 million in Q3 2024, due to increased operating expenses.
Lower Activity in Security Business
Lower activity with net expansions and new logos in the security business, particularly in EMEA and APAC regions.
Company Guidance
In the OneSpan Third Quarter 2025 Earnings Conference Call, the company provided guidance highlighting several key metrics and strategic initiatives. For the full year 2025, revenue guidance was adjusted to a range of $239 million to $241 million, down from the previous range due to lower-than-expected net expansions and a decline in hardware demand. The company anticipates software and services revenue to be between $190 million and $192 million, with hardware revenue expected to decline by approximately 16% from 2024. Despite these adjustments, OneSpan maintained its adjusted EBITDA guidance of $72 million to $76 million, reflecting strong profitability and cash generation. The company ended the third quarter with an annual recurring revenue (ARR) of $180 million, a 10% increase year-over-year, and expects to end the year with ARR between $183 million and $187 million. Strategically, OneSpan has focused on enhancing its software offerings, highlighted by the acquisition of Nok Nok, contributing to growth in subscription revenue, and a strategic investment in ThreatFabric, both aimed at bolstering the company's long-term growth through improved product capabilities.OneSpan Financial Statement Overview
Summary
OneSpan demonstrates strong financial health with impressive revenue growth and profitability. The income statement shows a robust gross profit margin and net profit margin, indicating efficient cost management. The balance sheet is solid with low leverage, enhancing financial resilience. However, the decline in free cash flow growth may require strategic attention to sustain long-term liquidity.Income Statement
OneSpan's income statement shows strong performance with a significant improvement in profitability. The TTM data reveals a gross profit margin of 73.87% and a net profit margin of 24.08%, indicating efficient cost management and strong profitability. Revenue growth is robust at 33.8% TTM, showcasing a positive growth trajectory. However, the EBIT margin has slightly decreased from the previous year, suggesting some operational challenges.85
Very Positive
Balance Sheet
The balance sheet is solid with a low debt-to-equity ratio of 0.027, indicating minimal leverage and financial stability. Return on equity is strong at 25.16%, reflecting efficient use of equity to generate profits. The equity ratio is healthy, suggesting a strong capital structure. However, the slight decrease in stockholders' equity over the periods may warrant attention.78
Positive
Cash Flow
Cash flow analysis shows a mixed picture. Operating cash flow is strong, with a positive ratio to net income, indicating good cash generation from operations. However, free cash flow growth is negative at -5.95% TTM, which could signal potential challenges in maintaining cash reserves. The free cash flow to net income ratio remains high, suggesting efficient cash conversion.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 241.44M | 243.18M | 235.11M | 219.01M | 214.48M | 215.69M |
| Gross Profit | 178.35M | 174.58M | 157.72M | 148.57M | 142.94M | 152.25M |
| EBITDA | 59.53M | 57.61M | -5.08M | -6.74M | -17.20M | 7.65M |
| Net Income | 58.15M | 57.08M | -29.80M | -14.43M | -30.58M | -5.46M |
Balance Sheet | ||||||
| Total Assets | 343.52M | 338.73M | 289.19M | 335.08M | 342.27M | 375.20M |
| Cash, Cash Equivalents and Short-Term Investments | 85.55M | 83.16M | 42.49M | 98.83M | 98.49M | 115.25M |
| Total Debt | 8.78M | 9.28M | 6.82M | 10.70M | 10.18M | 12.40M |
| Total Liabilities | 105.20M | 126.20M | 130.05M | 131.77M | 122.49M | 117.86M |
| Stockholders Equity | 238.32M | 212.53M | 159.14M | 203.31M | 219.78M | 257.34M |
Cash Flow | ||||||
| Free Cash Flow | 50.12M | 46.42M | -23.28M | -10.78M | -4.95M | 11.82M |
| Operating Cash Flow | 58.14M | 55.67M | -10.73M | -5.76M | -2.75M | 14.92M |
| Investing Cash Flow | -21.99M | -9.30M | -12.01M | 46.59M | -10.98M | -4.66M |
| Financing Cash Flow | -27.56M | -5.24M | -32.09M | -7.31M | -10.39M | -7.06M |
OneSpan Technical Analysis
Negative
12.47
Price Trends
12.56
Negative
13.90
Negative
14.46
Negative
Market Momentum
<0.01
Positive
42.79
Neutral
44.46
Neutral
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 12.47 is below the 20-day moving average (MA) of 12.82, below the 50-day MA of 12.56, and below the 200-day MA of 14.46, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 42.79 is Neutral, neither overbought nor oversold. The STOCH value of 44.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OSPN.
OneSpan Risk Analysis
OneSpan disclosed 43 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $1.25B | 25.50 | 23.88% | 1.33% | 10.27% | 3.52% | |
72 Outperform | $1.98B | 22.74 | 5.91% | ― | 9.60% | ― | |
71 Outperform | $483.71M | 8.62 | 26.86% | 3.75% | -1.43% | 101.80% | |
68 Neutral | $675.60M | -119.59 | ― | ― | ― | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $16.54B | 84.41 | 2.96% | ― | 12.12% | ― |
* Technology Sector Average
OSPN
OneSpan
12.47
-5.86
-31.98%
NTCT
Netscout Systems
27.95
5.80
26.19%
ATEN
A10 Networks
17.58
-1.20
-6.38%
OKTA
Okta
91.94
4.65
5.33%
CGNT
Cognyte Software
9.28
-0.38
-3.93%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.