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Tuesday, OneStream Inc. (NASDAQ:OS) received an Outperform rating from William Blair as they initiated coverage on the company’s shares. The firm recognized OneStream as a leading software platform that is pivotal in the modernization of financial operations within the office of the CFO. OneStream’s platform, currently valued at a market capitalization of $6.75 billion, is known for its ability to replace manual processes and outdated enterprise performance management (EPM) tools, which are currently used by many CFO offices, such as Oracle (NYSE:ORCL)’s Hyperion, SAP’s Business Objects, and IBM (NYSE:IBM)’s Cognos.
The endorsement from William Blair highlights OneStream’s significant growth trajectory in recent years. The company has demonstrated strong performance with revenue growth of 26.83% in the last twelve months, reaching $515.42 million. According to InvestingPro data, eight analysts have revised their earnings upwards for the upcoming period, signaling continued optimism about the company’s trajectory.
OneStream’s growth is attributed to its ability to streamline financial operations by replacing legacy systems with its modern software solutions. The platform’s design caters to the evolving needs of financial departments, aiming to enhance efficiency and accuracy in financial reporting and operations. The company maintains a strong financial position with a current ratio of 2.34 and holds more cash than debt on its balance sheet.
The Outperform rating by William Blair suggests confidence in OneStream’s potential for continued market penetration and financial success. The firm’s analysis points to OneStream’s strong performance and strategic position within the software industry, particularly in the financial management sector.
Investors may view the initiation of coverage and the positive rating as a sign of OneStream’s robust standing in the market and its potential for future growth. The company’s focus on modernizing the office of the CFO and its success in growing revenue are key factors that could continue to attract interest from the investment community.
In other recent news, OneStream Inc. has been the focus of several analyst updates and product announcements. Piper Sandler raised its price target for OneStream to $34, citing new product introductions at the company’s Splash user conference that align with its "Three Pillar" growth strategy. The firm maintains an Overweight rating and suggests that OneStream’s annual recurring revenue could potentially double within the next four years. Mizuho (NYSE:MFG) Securities also increased its price target to $33, maintaining an Outperform rating. The firm’s confidence stems from OneStream’s transition into an AI-powered platform and its potential to replace legacy systems, with a total addressable market estimated at $10 billion.
Needham reiterated its Buy rating with a $38 target, emphasizing OneStream’s focus on generative AI functionality and real-time data leverage, which could sustain high win rates. The company’s productization strategy, including the plug-and-play architecture Genesis, is noted for its potential to enhance customer adaptability. Additionally, OneStream launched its SensibleAI™ portfolio, introducing AI tools for finance teams to improve forecasting and decision-making. These tools are designed to reduce manual effort and enhance compliance, with expected availability later this year.
Stephens analyst Brett Huff raised OneStream’s price target to $30, highlighting the company’s solid first-quarter performance and sequential growth acceleration in billings. OneStream’s improved pro forma EBIT margin and a rise in free cash flow margin were also noted, reinforcing its long-term profit outlook. The company continues to guide for over 20% revenue growth in 2025, with international revenue showing significant year-over-year growth.
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