After a strong debut, analysts are mostly bullish on OneStream stock. The enterprise software company received several buy calls Monday as analysts weighed in on the stock for the first time after its initial public offering late last month.
The Birmingham, Mich.-based company offers a subscription software platform focused on chief financial officers and corporate finance teams.
On July 24, OneStream stock popped 30% from its initial public offering price of 20 on the Nasdaq.
On the stock market today, OneStream stock rose 2.1% to close at 29.30.
OneStream stock received a batch on new analyst calls on Monday, following a customary quiet period for firms that participated in the initial public offering. At least 10 analysts initiated coverage of the stock with a buy rating, according to data from FactSet. Two analysts initiated with neutral ratings, according to financial news website The Fly.
Analysts at BTIG initiated OneStream stock with a buy rating and price target of 37. OneStream "is one of the premier growth assets in all software and the new gold standard of Office of the CFO software, which is an increasingly critical and strategic area of investment in the enterprise," BTIG analyst Matt VanVliet said in a client note Sunday.
CFO Modernization Seen Boosting OneStream Stock
Meanwhile, analysts at TD Cowen see OneStream "riding the modernization wave" for CFO operations. TD analyst Derrick Wood initiated OneStream with a buy rating and price target of 34.
"Enterprise finance applications have lagged in the cloud transformation cycle and the market is still ridden with decades-old legacy technologies," Wood said in a client note Monday. "We think (OneStream) is positioned to disrupt the status quo, usher in new innovation around financial and operational workflows, and drive a strengthening legacy displacement and cloud migration wave."
Analysts with BofA Securities, meanwhile, believe that OneStream can "steadily increase its share of its lucrative and lightly penetrated $44 billion market for business performance management software." BofA analyst Koji Ikeda initiated coverage of the stock with a buy rating and price target of 35 in a client note Monday.
BofA noted that OneStream has been growing faster than back-office software peers. Ikeda forecasts sales growth of 27% this year for OneStream, compared with an industry average of 9% annual growth. Ikeda also is positive on OneStream's AI tools, which automate data preparation and other processes.
"Moreover, the AI tools aim to accelerate the creation of new applications," Ikeda said. "As more OneStream-powered apps are created, the platform would likely become even more entrenched, making it more difficult to replace."
OneStream Earnings Date
Founded 14 years ago, OneStream offers what it calls the Digital Finance Cloud to more than 1,400 customers. It competes with legacy technology vendors such as Oracle and SAP, along with software players such as Workday and the Thoma Bravo-owned Anaplan.
Private-equity firm KKR acquired a majority stake in OneStream in 2019, through an investment that valued OneStream at more than $1 billion. Its IPO price of 20 had OneStream debut at a valuation of $4.6 billion. The company raised $490 million through the deal.
OneStream's revenue grew 34% in 2023 to $375 million. Meanwhile, its net loss narrowed to $28.9 million from $65.5 million in 2022.
For its March-ending quarter, sales grew 39% year over year to $110.3 million. Its net loss was $5 million for the three-month period, down from a $23 million deficit a year earlier.
OneStream hit a new high on Friday after shares broke out of an IPO base Wednesday, according to MarketSurge charts. Meanwhile, OneStream will report results for its June-ended quarter on Sept. 3, its first report as a publicly traded company.
