Last week saw the newest quarterly earnings release from OneSpan Inc. (NASDAQ:OSPN), an important milestone in the company's journey to build a stronger business. It was a workmanlike result, with revenues of US$61m coming in 9.6% ahead of expectations, and statutory earnings per share of US$0.17, in line with analyst appraisals. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following last week's earnings report, OneSpan's three analysts are forecasting 2024 revenues to be US$242.9m, approximately in line with the last 12 months. Per-share earnings are expected to surge 83% to US$0.79. Before this earnings report, the analysts had been forecasting revenues of US$241.8m and earnings per share (EPS) of US$0.71 in 2024. Although the revenue estimates have not really changed, we can see there's been a solid gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The consensus price target rose 18% to US$14.50, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic OneSpan analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$14.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Over the past five years, revenues have declined around 0.8% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 3.7% decline in revenue until the end of 2024. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 12% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect OneSpan to suffer worse than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards OneSpan following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that OneSpan's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple OneSpan analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for OneSpan you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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