OneSpan Inc (OSPN) Stock Forecast & Price Target

OneSpan Inc. demonstrated a positive financial trend with Digital Agreements revenue increasing by 7% year-over-year (Y/Y) to $16.7 million, contributing approximately 29% of total revenue. The company's annual recurring revenue (ARR) also showed robust growth, rising by 10% Y/Y to $180 million, alongside an improvement in net revenue retention (NRR) to 103%. Additionally, the strength in the Software business, which represents around 80% of total revenue with a subscription revenue increase of 12%, further underscores the company’s solid momentum in its market.

OneSpan Inc. faces a negative outlook primarily due to a revised guidance indicating a projected -3% year-over-year organic revenue decline and significantly diminished growth in annual recurring revenue (ARR), which is now expected to be only approximately 5% year-over-year. The company has reported a total ARR of $180.2 million, which reflects only a 5% organic growth, alongside a significant reduction in full-year revenue expectations to a range of $239 million to $241 million, down from previous forecasts. Contributing to this downturn are softer demand in the hardware segment and weaker expansions primarily in the EMEA and APAC regions, as markets transition towards mobile-first authentication solutions, resulting in a substantial 17% drop in stock price following its Q3 earnings call.