Baird has shown confidence in OneStream Inc. (NASDAQ: OS) by raising its price target to $35 from the previous $32 while keeping an Outperform rating on the stock.
OneStream, a provider of software for the Office of the CFO, has recently gone public and reported a robust second quarter for the fiscal year 2024.
The company's revenue saw a year-over-year increase of 36%, while subscription growth was even more impressive at 44%.
The company's initial public offering took place in late July at a price of $20 per share and since then, OneStream has demonstrated considerable momentum, especially in the international market, which has been identified as a crucial area for growth.
Additionally, the company's artificial intelligence offering, Sensible ML, is garnering notable demand among new customers.
OneStream's total addressable market (TAM) within its "legacy" installed base is estimated at $10 billion. The company's strong platform and experienced management team contribute to Baird's optimistic outlook.
In other recent news, OneStream has been receiving positive attention from several financial firms following its strong second-quarter performance. Guggenheim maintained its Buy rating on OneStream, lifting the price target to $35, following the company's robust 36% revenue growth and a 31% growth in Annual Recurring Revenue (ARR).
The firm also noted OneStream's success in the current IT spending environment, attributing it to early adjustments and skilled operations.
Similarly, Needham and BofA Securities raised their price targets to $35 and $36 respectively, maintaining their Buy ratings. This came after OneStream's Q2 results met the high end of expected range, with a forecasted third-quarter subscription revenue growth of 35%, surpassing the anticipated 30%.
Truist Securities maintained a Buy rating and a $35.00 price target, emphasizing OneStream's alignment with previous estimates and the importance of the company's upcoming third-quarter and full-year forecasts.
Likewise, Scotiabank initiated coverage with a Sector Outperform rating and a $34 price target, highlighting OneStream's transformative role in unifying enterprise systems.
OneStream's management team provided positive insights on the demand for the company's core solutions, with an emphasis on the growing influence of artificial intelligence in their offerings.
InvestingPro Insights
Recent data from InvestingPro offers additional context to Baird's bullish stance on OneStream Inc. (NASDAQ: OS). As of the latest metrics, OneStream boasts a market capitalization of $7.1 billion, underscoring its substantial presence in the market since its recent IPO. Despite the company not being profitable in the last twelve months, with a negative P/E ratio of -212.64, investors are showing confidence, as reflected in the stock trading near its 52-week high, with the price at 96.43% of this peak.
The company's revenue growth remains impressive, with a 39.93% quarterly increase as of Q1 2024, and a gross profit margin of 69.79%. This demonstrates OneStream's ability to generate revenue efficiently, a key factor that may be contributing to the positive sentiment from analysts and investors alike. It's important to note that OneStream is operating with a moderate level of debt, which can be a sign of prudent financial management, especially for a company in its growth phase.
For readers interested in a deeper dive, there are additional InvestingPro Tips available, providing a comprehensive analysis of OneStream's financial health and market position. To explore these further, visit InvestingPro's dedicated section for OneStream at https://www.investing.com/pro/OS.
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