OneSpan Inc (OSPN) Stock Forecast & Price Target

OneSpan Inc. has demonstrated solid financial performance, with Digital Agreements revenue increasing by 7% year-over-year to $16.7 million, contributing approximately 29% to total revenue, while subscription revenue within this segment rose by 11%. The company's Annual Recurring Revenue (ARR) reached $180 million, reflecting a 10% year-over-year growth and an improvement in Net Revenue Retention (NRR) to 103%. The Software business, accounting for around 80% of total revenue, showed strength with an impressive 12% increase in subscription revenue, highlighting the company's robust position in the IT security market.

OneSpan Inc. faces a negative outlook primarily due to a projected -3% year-over-year decline in organic revenue and significantly lower revenue guidance for FY25, now estimated between $239 million to $241 million, a decrease from prior expectations. The company's total annual recurring revenue (ARR) growth is stagnating, reported at 10% year-over-year but only 5% organically, reflecting weakened demand across its security business, particularly in the EMEA and Asia-Pacific regions. Additionally, the firm experienced a sharp drop in its stock price following the Q3 earnings call, highlighting investor concerns over ongoing declines in hardware demand and slower-than-anticipated expansion efforts.