How are energy investors positioned?
On Wednesday, Goldman Sachs analyst Adam Hotchkiss revised the price target for OneStream Inc. (NASDAQ: OS) to $36.00, a slight decrease from the previous $37.00, while reaffirming a Buy rating on the company’s shares. According to InvestingPro data, analyst targets for OneStream range from $30 to $40, with a strong consensus recommendation of 1.59 (where 1 is Strong Buy and 5 is Strong Sell). The adjustment follows OneStream’s fourth quarter and full-year 2024 financial results, which showcased revenue exceeding both Goldman Sachs’ estimates and the consensus, propelled by the company’s robust performance in its core Corporate Performance Management (CPM) business. OneStream’s growth was also attributed to the continued acquisition of new customers in the commercial and mid-market sectors, with these new clients comprising 60% of the revenue for both the quarter and the fiscal year.
OneStream’s expansion has been further supported by a rising demand for its non-core CPM products. The company maintains strong financial health with a current ratio of 2.45, indicating robust liquidity. However, the analyst noted that various factors such as global geopolitical tensions, regulatory changes, and a strengthening U.S. dollar have had a modest impact on the company’s year-end metrics. These influences were most pronounced among large multinational corporations and the public sector.
Despite these challenges, management’s revenue growth projections for the first quarter and the full fiscal year 2025 are seen as conservative by Goldman Sachs. The firm anticipates less than 19% year-over-year growth in Q1 and less than 20% for FY25. According to Hotchkiss, this cautious outlook may present significant opportunities for OneStream to outperform expectations, particularly in the first quarter.
The analyst’s perspective is bolstered by OneStream’s robust customer retention rate, reported at 98% Gross Retention Rate (GRR), and the company’s innovation track record, which includes the introduction of 15 new products in FY25. Furthermore, the demand for OneStream’s existing products, such as the Finance AI solution, which saw bookings quadruple in FY24, underscores the company’s expanding market share and Total (EPA:TTEF) Addressable Market (TAM).
In light of the approximately 13% decline in OneStream’s stock price after hours, Goldman Sachs views the current situation as an opportune moment for investment, given the company’s strong fundamentals and potential for market share growth. The firm maintains its Buy rating and sets a 12-month price target of $36 for OneStream Inc. stock. InvestingPro analysis suggests the stock is currently overvalued, with additional insights available in the comprehensive Pro Research Report, which includes detailed valuation metrics and growth projections among 8+ key financial health indicators.
In other recent news, OneStream Inc. has been the subject of various analysts’ reviews and a secondary stock offering. Raymond (NSE:RYMD) James adjusted the company’s price target to $32, maintaining an Outperform rating despite foreign exchange issues and deal cycles impacting the fourth-quarter earnings. JPMorgan downgraded OneStream’s stock rating from Overweight to Neutral and reduced its price target to $26, following concerns about the company’s performance.
Morgan Stanley (NYSE:MS), on the other hand, upgraded OneStream’s stock rating from Equalweight to Overweight, setting a new price target of $37.00, citing an attractive entry point for the company’s shares. Goldman Sachs also initiated coverage on OneStream, assigning the stock a Buy rating and setting a price target of $37.00, emphasizing the company’s consistent revenue growth and high retention rates.
In addition to these developments, OneStream announced a secondary stock offering of 15 million shares of its Class A common stock. The company plans to use the proceeds from its shares to buy LLC units from KKR Dream Holdings LLC. These recent developments reflect the ongoing market analysis and strategic decisions of OneStream Inc.
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