How are energy investors positioned?
On Wednesday, JPMorgan analysts downgraded OneStream Inc. (NASDAQ: OS) stock rating from Overweight to Neutral and reduced its price target to $26 from $30. The revision follows the release of OneStream’s fourth-quarter results, which confirmed concerns previously raised by JPMorgan about the company’s performance. According to InvestingPro data, the stock currently trades at $30.18, with analysts maintaining an overall bullish consensus and a high target of $40.
In a statement, JPMorgan highlighted OneStream’s positive attributes, including its high gross retention rates, the organic nature of its platform, and its capability to replace other specialized products in the market. These strengths are expected to continue supporting the company in the long term. InvestingPro analysis reveals strong fundamentals, with the company maintaining a healthy current ratio of 2.45 and holding more cash than debt on its balance sheet.
Despite these advantages, recent data and the latest quarterly figures have shown a trend of deal slippage at OneStream. This pattern has led to a reassessment of the stock’s outlook, with the expectation that the share price may stay within the $20 range for some time. JPMorgan suggests that the stock might not see significant movement until certain challenges are resolved. While the company reported a gross profit margin of 63.9%, InvestingPro data indicates it’s currently trading at elevated revenue and Price/Book multiples, suggesting potential valuation concerns.
OneStream’s recent quarter results have played a crucial role in JPMorgan’s revised outlook. The confirmation of deal slippage has been a key factor in the decision to downgrade the stock rating and lower the price target.
Investors and market watchers will be keeping a close eye on OneStream as it addresses the issues highlighted by JPMorgan. The company’s future performance and ability to overcome these hurdles will be crucial in determining the trajectory of its stock price.
In other recent news, OneStream Inc. has been the subject of positive analyst attention, with both Morgan Stanley (NYSE:MS) and Goldman Sachs expressing confidence in the company’s future prospects. Morgan Stanley upgraded the company’s stock rating from Equalweight to Overweight, citing strong unit economics, significant market potential, and anticipated growth tailwinds for 2025. Similarly, Goldman Sachs initiated coverage on OneStream, assigning the stock a Buy rating, and highlighted the company’s consistent revenue growth and high retention rates since fiscal year 2023.
In addition to the analyst upgrades, OneStream announced a proposed underwritten public offering of 15 million shares of its Class A common stock. The offering includes over 9 million shares from selling stockholders and nearly 6 million shares from OneStream. The company plans to use the proceeds from its shares to buy LLC units from KKR Dream Holdings LLC, maintaining the current count of outstanding shares and LLC units post-offering.
These are recent developments that indicate a positive outlook for OneStream, based on its solid performance, future growth potential, and recent secondary stock offering. The company’s robust business model and innovative platform are recognized by analysts from Morgan Stanley and Goldman Sachs, who see a compelling valuation and significant market potential for OneStream.
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