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Bull Of The Day: Onespan (OSPN)

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Onespan (OSPN - Free Report) is a Zacks Rank #1 (Strong Buy) that has a D for Value and an A for Growth.  This is a security software company that focuses on e-signatures and fraud protection.  Let’s explore more about this company in this Bull of The Day article.

Description

OneSpan Inc. provides software services. The Company designs and develops security software and e-signature solutions which protects devices and financial transactions from fraud and misuse. It delivers risk analytics, mobile security and authentication services. OneSpan Inc., formerly known as Vasco Data Sec, is based in Chicago

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

For Onespan, I see three straight beats and one miss of the Zacks Consensus Estimate over the last year.  The average positive earnings surprise over the last year works out to be a positive 501%.

Two quarters ago the company posted EPS of $0.19 when $0.01 was expected.  That 18 cent beat translated into a positive earnings surprise of 1,800% and skewed the average over the last year.

Earnings Estimates Revisions

Earnings estimates revisions is what the Zacks Rank is all about. 

The consensus estimate for the current quarter has held still at $0.19

Next quarter has no estimate at the moment on the Zacks system.

The full fiscal year 2024 estimate has moved from $0.99 to $1.07 over the last 60 days.

Next year has moved from $1.16 to $1.21.

Valuation

The forward PE multiple for OSPN is 11.8x which is well below the market multiple and the multiple of many of its peers.  The price to book multiple comes in at 2.8x and the price to sales multiple checks in at 1.97x.  The company has seen operating margins flip from negative 7.5% to a positive 4.4% over the last three quarters.  When a company has good revenue growth and an increase in operating margins they will often also see an increase in EPS.


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