On Thursday, Baird initiated coverage on OneStream Inc. (NASDAQ:OS) stock with an Outperform rating and a $32.00 price target.
The financial firm sees a significant opportunity for OneStream, drawing parallels to the early stages of Workday (NASDAQ:WDAY), a leader in enterprise cloud applications for finance and human resources.
OneStream, known for its smart corporate performance management software, has been recognized by Baird for its experienced management team, which has a proven track record.
The analyst notes that the company is poised to consolidate its legacy Total Addressable Market (TAM), which represents a straightforward opportunity stemming from acquisitions made previously.
Moreover, the firm acknowledges OneStream's potential in platform expansion, indicating that industry conversations and checks support the view that there is a meaningful opportunity within Oracle (NYSE:ORCL) customer accounts. The company's early successes in penetrating markets beyond its existing base were also highlighted as a positive indicator of its growth trajectory.
Baird's coverage points to OneStream's reasonable valuation, suggesting that it is priced attractively for investors considering its prospects for growth and free cash flow (FCF) that are expected to surpass those of its peer group.
This financial outlook presents OneStream as a favorable investment option in both the near and medium term within the financial software sector.
InvestingPro Insights
In light of Baird's optimistic outlook on OneStream Inc. (NASDAQ:OS), analyzing real-time data from InvestingPro provides additional context for investors. OneStream operates with a moderate level of debt, a consideration for those evaluating the company's financial stability. Despite not being profitable over the last twelve months, the company has experienced a significant revenue growth of nearly 40% in Q1 2023, showcasing its potential for expansion and market penetration.
InvestingPro Tips suggest that OneStream is trading at a high revenue valuation multiple and near its 52-week high, which might indicate a strong market belief in its future performance. However, it's crucial to note that the company does not pay a dividend, which could be a factor for income-focused investors. With a market cap of $6.42 billion and a robust gross profit margin of 69.79%, OneStream presents a compelling profile for those looking at growth prospects in the software sector.
For investors seeking a deeper dive into OneStream's financial nuances, there are additional InvestingPro Tips available that could further inform investment decisions. With a current fair value estimate of $20.23, according to InvestingPro, potential investors should weigh the company's growth prospects against its current trading price of $27.85 to determine the right entry point for their investment strategy.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.