OneStream Receives Bullish Ratings from Wall Street Analysts

OneStream receives bullish ratings in Wall Street coverage initiations By Investing.com

Investing.com -- Wall Street analysts have initiated coverage on OneStream Inc (NASDAQ:OS) with an overall bullish stance, citing the company's strong market position, rapid growth, and innovative platform designed for the Office of the CFO. Analysts from BofA Securities, Citi Research, and BTIG have all flagged OneStream's ability to capture a significant share of the market, supported by its differentiated offerings and strategic use of AI. BofA Securities has initiated coverage with a "buy" rating and a price objective of $35, suggesting a 22% upside from the current level. "We think OneStream has a disruptive and differentiated offering - allowing it to steadily increase its share of its lucrative and lightly penetrated (~1%) $44bn market for business performance management software," analysts at BofA said in a note. The company's strategy to replace traditional tools like Excel and outdated legacy systems has driven impressive growth, with revenue increasing by 34% year-over-year in 2023. BofA expects this robust growth trajectory to continue into 2024, projecting a 27% increase. Similarly, Citi Research has taken a "neutral/high risk" stance with a target price of $34. Citi acknowledges OneStream's leadership in financial consolidation and its potential to benefit from the migration of legacy systems like Oracle (NYSE:ORCL) and SAP to the cloud. "While we see a lot to like, a 45% return since IPO and a 92nd percentile EV/rev multiple create a more balanced risk/reward despite conservative estimates," analysts at Citi said. The brokerage appreciates OneStream's strong net revenue retention rate, which has recently climbed to 118%, and its ability to leverage AI to enhance its platform's capabilities. BTIG, on the other hand, shares a more optimistic view with a "buy" rating and a price objective of $35. "In the current macro environment where efficiency is key, OneStream provides the most visibility, functionality, and extensibility of any platform in the financial analysis, planning, and performance management in the market today," said analysts at BTIG. The brokerage emphasizes that the platform's ability to replace legacy systems and its growing adoption among over 1,400 customers are indicative of its market potential. With the business performance management market still lightly penetrated, BTIG sees significant room for OneStream to expand its footprint. A key theme across is OneStream's strategic use of AI to enhance its offerings. BofA Securities and Citi Research both mention the company's AI initiatives, particularly the Sensible AI and Sensible ML tools, which automate routine tasks and accelerate application development. These advancements are expected to further entrench OneStream's platform within organizations and drive future growth. The analysts also address valuation concerns. BofA Securities justifies its premium price objective based on a 14.5x enterprise value to CY25 revenue multiple, reflecting the company's strong growth potential. Citi Research, while acknowledging OneStream's strengths, remains cautious due to the stock's high valuation. BTIG supports a premium valuation given the company's growth prospects and market positioning. A majority of analysts who have initiated coverage on the stock are bullish, with 14 of them giving the stock bullish ratings.

OneStream gets initiated with bullish views at BofA

BofA began coverage of OneStream (NASDAQ:OS) with a Buy rating and a $35 price target OneStream is a leading provider of software for professionals, such as CFOs, who are analyzing, planning, and reporting business performance. The analysts think OneStream -- which went public in July -- has a disruptive and differentiated offering, allowing it to steadily increase its share of its lucrative and lightly penetrated (about 1%) $44B market for business performance management software. This has resulted in OneStream growing faster than the peer average (revenue +34% year-over-year versus +12% peers for 2023), and the analysts expect this to continue (+27% versus +9% for 2024). The analysts added that OneStream is seeking to replace Excel and legacy vendors in areas such as closing the books, and sales team planning. This is only the beginning. Over the long-term, the analysts believe the company has the potential to extend its reach to every process that is overseen by CFOs. This is possible because OneStream is a software developer friendly tool on which any application to modernize the Office of the CFO can be built. This is a different approach, as back-office apps mostly automate specific functions. BofA's checks with customers and partners suggest this is among the many reasons why over 1,400 customers (+20% year-over-year) use the platform today, according to the analysts. In addition, the analysts estimate that OneStream can target 175k ideal organizations, a sign that growth will continue for some time. OneStream is increasingly adding AI functionality to its offerings. Its AI strategy called Sensible AI debuted in 2021. It is enabling users to spend more time making strategic business decisions, and less time on mundane tasks by automating processes like data preparation and populating data fields, as per the analysts. The analysts noted that the AI tools aim to accelerate the creation of new applications. As more OneStream-powered apps are created, the platform would likely become more entrenched, making it more difficult to replace.

JPMorgan sees bright future for OneStream stock, citing platform strengths By Investing.com

On Monday, JPMorgan (NYSE:JPM) initiated coverage on OneStream Inc. (NASDAQ:OS) stock with an Overweight rating and a price target of $30.00. The new coverage highlights OneStream as a significant player in the software platform market, particularly for financial management solutions aimed at transforming the Office of the CFO. With its cloud-based products designed for Budgeting, Planning, Forecasting, and Financial Close & Consolidation, OneStream has earned a strong reputation for providing a unified solution across various enterprise systems. OneStream's platform is praised for its ability to serve as a single source of truth for finance and accounting teams, streamlining the creation of financial statements and regulatory filings. The software's automation capabilities are noted to save time, reduce errors, and facilitate collaboration across departments. JPMorgan's positive outlook is based on several factors, including OneStream's high customer retention rate, cohesive platform development, and its role as a consolidator of legacy systems. OneStream's financial performance has been robust, with shares appreciating significantly since their initial public offering. The company's preliminary Q2 results have surpassed forecasts, leading JPMorgan to update their financial model to reflect the positive performance. However, the analyst also cautions that Q3 may present a challenging comparison due to a particularly large deal with a U.S. Defense agency in the third quarter of 2023, suggesting that the upcoming Q2 report might not follow the typical pattern of beating projections and raising targets. In other recent news, OneStream Inc. has been attracting attention in the financial sector, with multiple firms initiating coverage. Citi has given OneStream a neutral rating, acknowledging the company's strong position in the CFO's office platform space and an impressive Net Revenue Retention rate of 118%. Despite the high enterprise value to revenue multiple, Citi considers the current stock price to reflect the company's prospects accurately. BTIG has initiated coverage of OneStream with a Buy rating, citing the company's potential for industry-leading growth and margin improvements. The firm also anticipates new product introductions, including advancements in artificial intelligence and automation features on the OneStream platform, to bolster this growth. Meanwhile, Baird has initiated coverage with an Outperform rating, recognizing OneStream's potential for platform expansion and its successes in penetrating markets beyond its existing base. These recent developments highlight OneStream's position as a leading entity, particularly within the Office of the CFO software market. The recent initiation of coverage by JPMorgan on OneStream Inc. (NASDAQ:OS) with an Overweight rating and a price target of $30.00 underscores the company's potential in the financial management solutions sector. In light of this, InvestingPro data and tips provide additional context for investors considering OneStream's stock. The company's market capitalization stands at $6.62 billion, reflecting its significant presence in the market. Despite not being profitable over the last twelve months, OneStream has demonstrated impressive revenue growth of nearly 40% in Q1 2024, signaling strong demand for its financial management solutions. InvestingPro Tips suggest that OneStream's stock is currently trading near its 52-week high, which is supported by the stock's price being at approximately 97% of this peak. This could indicate a strong market confidence in the company's future prospects. However, it's important to note that the stock's RSI suggests it is in overbought territory, which could imply a potential pullback. Additionally, OneStream operates with a moderate level of debt and does not pay a dividend, which might be relevant for investors focused on capital growth over income. For those looking for more detailed analysis, there are additional InvestingPro Tips available on the platform. Investors should also consider the company's high revenue valuation multiple, which may suggest that the stock is priced optimistically relative to its current financials. With a forward-looking approach, JPMorgan's coverage and the InvestingPro insights together offer a comprehensive view of OneStream's position in the market and its potential trajectory. For a deeper dive into OneStream's financial health and stock performance, interested parties can explore further InvestingPro Tips, with a total of 7 available for review.

BTIG starts OneStream stock at Buy, sets PT, citing strong CFO software platform By Investing.com

On Monday, BTIG initiated coverage on OneStream Inc. (NASDAQ: OS), bestowing the enterprise software provider with a Buy rating and setting a price target of $37.00. The firm highlighted OneStream's position as a leading growth entity in the software sector, particularly within the Office of the CFO software market, which is gaining importance as a strategic investment area for enterprises. The analyst from BTIG pointed out that OneStream's platform offers unparalleled visibility, functionality, and extensibility in financial analysis, planning, and performance management. This is particularly noteworthy in the current economic landscape, where efficiency is paramount. Moreover, the company's growth metrics are among the best in the software industry, which is impressive given that it operates in a market segment known for cautious buyers and users who are often resistant to new technology. OneStream's customer satisfaction ratings are exceptionally high, reflecting the company's ability to meet and exceed user expectations. This is further evidenced by a robust net-expansion rate of 116%, which supports the positive feedback from customers. The BTIG analyst anticipates that OneStream will continue to exhibit industry-leading growth and anticipates improvements in margins, projecting the company to achieve over 20% in free cash flow margins in the coming years. The firm's outlook for OneStream is optimistic, with the belief that the company will not only meet but surpass current financial estimates. This confidence is bolstered by the forthcoming introduction of new products, including advancements in embedded artificial intelligence and automation features on the OneStream platform. According to BTIG, these factors make OneStream a must-have stock for growth investors, with the expectation that the company will continue to outperform in the market.

Piper Sandler starts OneStream stock with Overweight, $32 target By Investing.com

On Monday, Piper Sandler began coverage on shares of OneStream Inc. (NASDAQ:OS), assigning an Overweight rating and setting a price target of $32.00. The firm highlighted OneStream's impressive growth, transforming from its inception in 2012 to a company with an annual recurring revenue (ARR) exceeding $500 million. The leadership team, comprised largely of former Oracle (NYSE:ORCL) Hyperion employees, has been instrumental in the company's development. OneStream, known for creating a modern finance platform that integrates financial and operational data, is recognized for its potential to quadruple its ARR to over $2 billion in the coming years. This growth expectation is supported by the opportunity to replace Hyperion systems, especially as they approach their end of support in 2031. The Overweight rating is justified by OneStream's compelling business model, which boasts a high gross retention rate of 98% and consistent growth exceeding 20%. Additionally, the company is expected to see an enhancement in its free cash flow (FCF) margins within the next 12 to 24 months. Piper Sandler's initiation of coverage reflects confidence in OneStream's market position and its ability to capitalize on the unmet needs within the market. The price target of $32.00 suggests a positive outlook for the company's stock performance in the foreseeable future. In other recent news, OneStream Inc. has been in the spotlight with several financial firms initiating coverage. JPMorgan (NYSE:JPM) initiated coverage with an Overweight rating, citing the company's significant role in the software platform market, particularly for financial management solutions. The firm also pointed out OneStream's robust financial performance and high customer retention rate. Simultaneously, Citi initiated coverage of OneStream with a neutral rating, acknowledging the company's strong position in the CFO's office platform space and an impressive Net Revenue Retention rate of 118%. Despite a high enterprise value to revenue multiple, Citi considers the current stock price to reflect the company's prospects accurately. BTIG initiated coverage on OneStream with a Buy rating, citing the company's potential for industry-leading growth and margin improvements. The firm anticipates new product introductions, including advancements in artificial intelligence and automation features on the OneStream platform, to bolster this growth. Lastly, Baird initiated coverage of OneStream with an Outperform rating, recognizing the company's potential for platform expansion and its successes in penetrating markets beyond its existing base. These recent developments highlight OneStream's position as a leading entity, particularly within the Office of the CFO software market.

OneStream stock rated Neutral on strong NRR and high EV/rev multiple By Investing.com

On Monday, Citi initiated coverage of OneStream Inc. (NASDAQ: OS) with a neutral rating and a price target of $34.00. The firm acknowledged OneStream as a prominent player in the CFO's office platform space, with a strong foundation in financial consolidation and an expanding role in artificial intelligence. OneStream's platform operates within the $7 billion Enterprise Performance Management (EPM) market, where it has been leveraging its data capabilities to capture various use cases. This strategy has resulted in an impressive Net Revenue Retention (NRR) rate of 118%. Citi's stance is influenced by the stock's significant appreciation, with a 45% return since its initial public offering (IPO). The company's current enterprise value to revenue (EV/rev) multiple is positioned in the 92nd percentile, suggesting a high valuation compared to peers. The neutral rating reflects a balanced view of risk and reward for OneStream's stock, despite the firm's conservative estimates. Citi suggests that while there are many positive aspects to OneStream's business, the current stock price adequately reflects its prospects. The investment firm indicated a willingness to become more bullish on the stock in the event of a price pullback, citing a "compelling repeat founder story, large replacement opportunity, and ramping AI initiatives" as key factors that could drive future growth. In other recent news, OneStream Inc. has been in the spotlight as prominent financial firms BTIG and Baird initiated coverage on the company. BTIG bestowed a Buy rating on OneStream shares, setting a price target of $37.00, while Baird rated the stock as 'Outperform' with a $32.00 price target. These developments highlight OneStream's position as a leading growth entity, particularly within the Office of the CFO software market. BTIG highlighted OneStream's platform for its visibility, functionality, and extensibility in financial analysis, planning, and performance management. The firm anticipates that OneStream will continue to exhibit industry-leading growth and improvements in margins, projecting the company to achieve over 20% in free cash flow margins in the coming years. New product introductions, including advancements in embedded artificial intelligence and automation features on the OneStream platform, are expected to bolster this growth. Simultaneously, Baird recognized OneStream for its experienced management team and its potential in platform expansion. The firm also acknowledged the company's early successes in penetrating markets beyond its existing base as a positive indicator of its growth trajectory. As investors weigh Citi's neutral stance on OneStream Inc. (NASDAQ: OS), real-time data from InvestingPro provides additional context to the company's financial health and market performance. OneStream's market capitalization stands at $6.62 billion, underscoring its significant presence in the EPM market. Despite being a key player in its field, the company is not profitable over the last twelve months, as evidenced by a negative P/E ratio of -212.64. This aligns with Citi's implication of high valuation, further supported by OneStream trading at a high revenue valuation multiple. OneStream has demonstrated robust revenue growth, with a quarterly increase of 39.93% as of Q1 2024, reflecting its successful expansion strategies. However, the company's gross profit margin of 69.79% indicates its ability to retain a substantial portion of its revenue after the cost of goods sold. According to InvestingPro Tips, OneStream's stock generally trades with low price volatility, which might appeal to investors looking for stable equity performance. Additionally, the stock is trading near its 52-week high, currently at 96.93% of this peak. For those interested in delving deeper into OneStream's financials and market prospects, there are numerous additional InvestingPro Tips available at https://www.investing.com/pro/OS. These insights could provide investors with a more comprehensive understanding of the company's position and potential investment opportunities.