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Investing.com - B.Riley has initiated coverage on OneSpan Inc. (NASDAQ:OSPN) with a Buy rating and a price target of $23.00, citing the company’s strong position in the multi-factor authentication (MFA) market. According to InvestingPro data, the company maintains excellent financial health with a "GREAT" overall score, holding more cash than debt on its balance sheet.
The research firm highlights OneSpan as a leading provider of MFA solutions for banks and financial institutions, noting the company’s blue-chip customer base and the rapidly growing demand for authentication services. B.Riley also identifies artificial intelligence as a compelling catalyst for future demand. The company’s strong market position is reflected in its impressive 74% gross profit margin and robust return on equity of 28%.
OneSpan’s eSignature technology represents another growth opportunity for the company, according to the research note. The firm points to OneSpan’s differentiation through high-end security capabilities that meet stringent compliance standards in the financial sector.
B.Riley expresses confidence in CEO Victor Limongelli’s execution since joining in early 2024, crediting him with positioning the company for profitable growth and maximizing shareholder value. The research firm notes that subscription sales contribute more than 60% of OneSpan’s revenue, with adjusted EBITDA margins of approximately 30%.
Despite OneSpan stock declining 26% year-to-date, B.Riley views the company as fundamentally sound with attractive prospects, considering its current valuation of 8.6x CY27E EPS as a buying opportunity. The firm also points to OneSpan’s 3.37% dividend yield as an additional benefit for investors. Trading at an EV/EBITDA multiple of 7.46x and showing strong free cash flow yield, InvestingPro analysis suggests the stock is currently undervalued, with additional metrics and insights available in the Pro Research Report.
In other recent news, OneSpan Inc. reported impressive financial results for the second quarter of 2025, surpassing earnings expectations. The company achieved earnings per share of $0.34, beating the anticipated $0.29, while revenue reached $59.8 million, exceeding the forecast of $59.03 million. These results indicate strong performance and investor confidence. Additionally, DA Davidson has added OneSpan to its STAMPEDE list under the "E - Excess Cash" category, maintaining a Neutral rating with a $15.00 price target. The firm praised OneSpan for its effective cost reduction and improved free cash flow generation. OneSpan has also returned excess cash to shareholders through multiple channels, a factor contributing to its inclusion on the STAMPEDE list. These developments highlight OneSpan’s strategic financial management and positive market reception.
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