OneSpan Inc (OSPN) Stock Forecast & Price Target

OneSpan Inc has exhibited solid financial growth, highlighted by a 7% year-over-year increase in Digital Agreements' revenue to $16.7 million, contributing approximately 29% to total revenue, with subscription revenue within this segment growing 11% year-over-year. Additionally, the company's Annual Recurring Revenue (ARR) rose 10% year-over-year to $180 million, further supported by a sequential increase in Net Revenue Retention (NRR) to 103%. Notably, the strength in the Software business, which now comprises about 80% of total revenue, coupled with a 12% increase in subscription revenue, underscores the positive momentum and resilience of OneSpan's financial performance.

OneSpan Inc. has revised its revenue guidance for FY25 downward from $245 million–$251 million to a new range of $239 million–$241 million, attributing this to weakened hardware demand and challenging market conditions in the Europe, Middle East, and Africa (EMEA) regions. Despite total annual recurring revenue (ARR) showing a reported increase of 10% year-over-year, organic growth is only approximately 5%, indicating a slowdown in underlying business momentum. This revised outlook has contributed to a significant sell-off, with the stock dropping nearly 17% following the company's Q3 earnings call, reflecting concerns over the sustainability of revenue growth amid ongoing secular declines in certain segments.