On Monday, Piper Sandler began coverage on shares of OneStream Inc. (NASDAQ:OS), assigning an Overweight rating and setting a price target of $32.00. The firm highlighted OneStream's impressive growth, transforming from its inception in 2012 to a company with an annual recurring revenue (ARR) exceeding $500 million. The leadership team, comprised largely of former Oracle (NYSE:ORCL) Hyperion employees, has been instrumental in the company's development.
OneStream, known for creating a modern finance platform that integrates financial and operational data, is recognized for its potential to quadruple its ARR to over $2 billion in the coming years. This growth expectation is supported by the opportunity to replace Hyperion systems, especially as they approach their end of support in 2031.
The Overweight rating is justified by OneStream's compelling business model, which boasts a high gross retention rate of 98% and consistent growth exceeding 20%. Additionally, the company is expected to see an enhancement in its free cash flow (FCF) margins within the next 12 to 24 months.
Piper Sandler's initiation of coverage reflects confidence in OneStream's market position and its ability to capitalize on the unmet needs within the market. The price target of $32.00 suggests a positive outlook for the company's stock performance in the foreseeable future.
In other recent news, OneStream Inc. has been in the spotlight with several financial firms initiating coverage. JPMorgan (NYSE:JPM) initiated coverage with an Overweight rating, citing the company's significant role in the software platform market, particularly for financial management solutions. The firm also pointed out OneStream's robust financial performance and high customer retention rate.
Simultaneously, Citi initiated coverage of OneStream with a neutral rating, acknowledging the company's strong position in the CFO's office platform space and an impressive Net Revenue Retention rate of 118%. Despite a high enterprise value to revenue multiple, Citi considers the current stock price to reflect the company's prospects accurately.
BTIG initiated coverage on OneStream with a Buy rating, citing the company's potential for industry-leading growth and margin improvements. The firm anticipates new product introductions, including advancements in artificial intelligence and automation features on the OneStream platform, to bolster this growth.
Lastly, Baird initiated coverage of OneStream with an Outperform rating, recognizing the company's potential for platform expansion and its successes in penetrating markets beyond its existing base. These recent developments highlight OneStream's position as a leading entity, particularly within the Office of the CFO software market.
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