OneSpan Inc (OSPN) Stock Forecast & Price Target

OneSpan Inc. has demonstrated significant revenue growth in its Digital Agreement segment, contributing 30% to total revenue with a year-over-year increase of 23%, exceeding prior estimates. The company’s security subscription revenue reached $18.6 million, marking a 29% increase, primarily driven by an expansion of licenses among existing customers. Management has reaffirmed a favorable full-year 2024 annual recurring revenue (ARR) outlook of $166 million to $170 million, alongside projections for improved gross margins, which are now estimated at 70%, reflecting the organization's strong sales execution and operational efficiency.

OneSpan Inc. reported a revenue decline of 4% year-over-year (Y/Y) for the third quarter, resulting in a downward revision of its fiscal year 2025 revenue estimate from $254 million to $247 million, indicating potential challenges in sustaining growth. A significant 36% Y/Y drop in hardware revenue, which comprised 22% of total revenue, is expected to negatively impact the overall performance of the company, particularly within its Security Solutions segment, which is forecasted to decline by 15% Y/Y. The persistence of challenges in the hardware segment, exacerbated by the shift towards mobile-first banking, coupled with slightly lower earnings per share projections, adds to the concerns regarding OneSpan's financial outlook.