BMO Capital Markets initiated coverage on OneStream Inc. OS, an enterprise Finance management platform provider.
“We see OneStream positioned to gain share thanks to strength in data management, consolidation, and Artificial Intelligence/Machine Learning (AI/ML), which help differentiate it against a crowded field of both legacy and modern competitors, with broader ERP and financial application cloud migrations a tailwind.”
In a mixed landscape for “back-office” software spending, BMO Capital identifies a promising opportunity to exceed forecasts through new client acquisitions.
Additionally, recent discussions with several OneStream customers indicate significant potential to expand usage with new applications, which could maintain an NRR of around 110%. Together, these factors point to a compelling “beat and raise” scenario for both revenue and profit in the short term.
The analyst writes that the companies in the back-office sector are rapidly integrating new AI tools, but OneStream is already delivering value to its clients. Its Sensible ML product, while still in the early stages of adoption, is proving to be a powerful resource for enhancing business forecasting.
The analyst has initiated coverage on OneStream with an Outperform rating and price target of $38.
BMO Capital projects double-digit growth in the enterprise performance management software market, currently valued at around $7 billion. This growth is driven by the shift of ERP systems to the cloud, ongoing potential to capture market share from Excel-based workflows, and the opportunity to broaden use cases both within and outside the finance suite.
The analyst notes that the company’s estimate of a roughly $50 billion global market opportunity is credible, backed by their seat-based, bottom-up analysis. With less than 2% market share currently, this suggests a strong long-term growth potential, though the company will need to broaden its use cases over time steadily.
Price Action: OS stock is up 4.31% at $33.96 at last check Monday.
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