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OneSpan Inc (OSPN)
NASDAQ:OSPN
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OneSpan
(NASDAQ:OSPN)
Rating:72Outperform
Price Target:
$17.00
▲( 8.14% Upside)
OneSpan (OSPN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$615.89M
Dividend Yield0.75%
Average Volume (3M)385.17K
Price to Earnings (P/E)10.9
Beta (1Y)1.35
Revenue Growth-0.26%
EPS GrowthN/A
CountryUS
Employees465
SectorTechnology
Sector Strength75
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.45
Shares Outstanding38,230,470
10 Day Avg. Volume540,830
30 Day Avg. Volume385,167
Financial Highlights & Ratios
PEG Ratio5.07
Price to Book (P/B)2.60
Price to Sales (P/S)0.00
P/FCF Ratio12.01
Enterprise Value/Market Cap0.82
Enterprise Value/Revenue0.52
Enterprise Value/Gross Profit2.91
Enterprise Value/Ebitda2.55
Forecast
1Y Price Target
$19.33Price Target Upside22.96% 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 exhibits a strong financial performance with solid profitability, a stable balance sheet, and effective cash flow management. The company has healthy profit margins and low leverage, but should focus on sustaining revenue growth and managing asset expansion to mitigate risks.Income Statement
OneSpan's income statement reflects a positive trajectory with increasing revenues and profitability. The TTM Gross Profit Margin is approximately 71.88%, indicating efficient cost management. The Net Profit Margin at 24.05% shows strong profitability. However, a slight decline in revenue growth rate by 0.61% from the previous year indicates a need for caution. The EBIT and EBITDA margins are healthy at 20.52% and 23.31%, respectively, demonstrating operational efficiency.72
Positive
Balance Sheet
OneSpan maintains a solid financial position with a low Debt-to-Equity ratio of 0.03 and a high Equity Ratio of 69.23%, indicating financial stability and low leverage. The Return on Equity is commendable at 25.15%, reflecting efficient use of equity to generate profits. However, the decrease in total assets and equity over the years may suggest potential challenges in asset growth.68
Positive
Cash Flow
The cash flow statement shows robust cash generation capabilities with a strong Free Cash Flow to Net Income Ratio of 0.86 in TTM, indicating effective conversion of profits into cash. The Operating Cash Flow to Net Income Ratio is slightly above 1, suggesting good quality of earnings. The Free Cash Flow Growth Rate of 8.18% over the past year signals effective cash flow management despite minor fluctuations in capital expenditure.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 241.70M | 243.18M | 235.11M | 219.01M | 214.48M | 215.69M | Gross Profit |
| 173.69M | 174.58M | 157.72M | 148.57M | 142.94M | 152.25M | EBIT |
| 49.59M | 44.80M | -28.87M | -495.00K | -26.13M | -5.26M | EBITDA |
| 56.31M | 54.85M | -5.08M | -6.74M | -17.20M | 6.75M | Net Income Common Stockholders |
| 58.12M | 57.08M | -29.80M | -14.43M | -30.58M | -5.46M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 64.88M | 83.16M | 42.49M | 98.83M | 98.49M | 115.25M | Total Assets |
| 277.14M | 338.73M | 289.19M | 335.08M | 342.27M | 375.20M | Total Debt |
| 5.31M | 6.93M | 6.82M | 8.44M | 10.18M | 12.40M | Net Debt |
| -59.57M | -76.23M | -35.67M | -88.06M | -53.20M | -76.00M | Total Liabilities |
| 106.27M | 126.20M | 130.05M | 131.77M | 122.49M | 117.86M | Stockholders Equity |
| 170.87M | 212.53M | 159.14M | 203.31M | 219.78M | 257.34M |
| Cash Flow | Free Cash Flow | ||||
| 50.22M | 46.42M | -23.28M | -10.81M | -4.95M | 11.82M | Operating Cash Flow |
| 58.07M | 55.67M | -10.73M | -5.79M | -2.75M | 14.92M | Investing Cash Flow |
| -7.87M | -9.30M | -12.01M | 46.59M | -10.98M | -4.66M | Financing Cash Flow |
| -9.36M | -5.24M | -32.09M | -7.31M | -10.39M | -7.06M |
OneSpan Technical Analysis
Neutral
15.72
Price Trends
15.23
Positive
16.70
Negative
16.44
Negative
Market Momentum
0.27
Negative
52.36
Neutral
32.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OSPN, the sentiment is Neutral. The current price of 15.72 is above the 20-day moving average (MA) of 15.58, above the 50-day MA of 15.23, and below the 200-day MA of 16.44, indicating a neutral trend. The MACD of 0.27 indicates Negative momentum. The RSI at 52.36 is Neutral, neither overbought nor oversold. The STOCH value of 32.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 2 New Risks
1.
The revenue recognition treatment of SaaS subscriptions and term subscription licenses for on-premises software may make it more challenging to accurately assess our operating results and the condition of our business. Q4, 2024
2.
We may experience difficulties increasing or maintaining our rate of revenue growth. Q4, 2024
OneSpan Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $635.38M | 5.85 | 34.42% | ― | 42.89% | 18.97% | |
72 Outperform | $615.89M | 10.95 | 28.92% | 0.75% | -0.26% | ― | |
69 Neutral | $854.70M | ― | -18.61% | ― | 4.11% | -935.85% | |
61 Neutral | $428.13M | ― | -1.64% | ― | 2.26% | 85.37% | |
61 Neutral | $11.41B | 10.19 | -7.05% | 2.95% | 7.46% | -10.52% | |
58 Neutral | $600.54M | ― | 57.39% | ― | 15.76% | 82.78% | |
57 Neutral | $787.92M | ― | -6.09% | ― | ― | ― |
* Technology Sector Average
Performance Comparison
OSPN
OneSpan
15.72
3.33
26.88%
YEXT
Yext
6.69
1.54
29.90%
RPAY
Repay Holdings
4.53
-5.30
-53.92%
PRTH
Priority Technology Holdings
7.48
3.30
78.95%
CGNT
Cognyte Software
10.69
3.24
43.49%
GCT
GigaCloud Technology, Inc. Class A
18.72
-13.63
-42.13%
OneSpan Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 8.04%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant achievements in cash generation, adjusted EBITDA, and digital agreements growth. However, these positives were balanced by declines in total and security revenue and headwinds from product transitions.Q1-2025 Updates
Positive Updates
Record High Adjusted EBITDA
OneSpan achieved record high adjusted EBITDA of $23 million, nearly 15% higher than last year's first quarter.
Strong Cash Generation
The company generated $29 million in cash from operations and ended the quarter with $105 million in cash on hand.
Digital Agreements Growth
Q1 subscription revenue in digital agreements grew 13%, driven by expansion contracts and new logos.
High Gross Margin
First quarter gross margin increased to 74% from 73% in the prior year quarter, driven by favorable product mix and improved operational efficiencies.
Dividend Program Initiation
OneSpan paid its first quarterly dividend of $0.12 per share, totaling approximately $4.6 million.
Negative Updates
Overall Revenue Decline
Total revenue declined by 2% from last year's Q1, mainly due to lower hardware revenues and the transition from perpetual maintenance contracts to term-based subscriptions.
Security Revenue Decline
First quarter security solutions revenue declined 5% year-over-year, in line with expectations.
Headwinds from Sunsetted Products
Headwinds related to sunsetted products impacted revenue growth, with a $1.4 million impact in the quarter and similar expectations for Q2.
Company Guidance
During the Q1 2025 earnings call, OneSpan reported a record high adjusted EBITDA of $23 million, marking a 15% increase from last year's $20 million, and representing 36% of revenue. The company's ARR grew by 9% to $168.4 million, aligning with the midpoint of their full-year guidance. Subscription revenue also saw a 9% increase, fueled by demand for software authentication, app shielding, and e-signature solutions. Despite a slight decline in total revenue, attributed to shifts from hardware to software solutions and the sunsetting of certain products, both the security and digital agreements business units remained profitable. The security segment achieved a 7% growth in subscription revenue, while the digital agreements unit saw a 13% increase. OneSpan's gross margin improved to 74% from 73% the previous year. Additionally, the company generated $29 million in cash from operations, ending the quarter with $105 million in cash on hand, and paid a $0.12 per share dividend. OneSpan confirmed its full-year 2025 guidance, expecting revenue between $245 million and $251 million, ARR between $180 million and $186 million, and adjusted EBITDA between $72 million and $76 million.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.