OneStream Stock To $17?
OneStream (OS) stock has jumped 28% during the past day, and is currently trading at $23.61. Our multi-factor assessment suggests that it may be time to reduce exposure to OS stock. We are primarily concerned current valuation and a price of $17 may not be out of reach. We believe there is not much to fear in OS stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Very Strong |
| Profitability | Very Weak |
| Financial Stability | Very Strong |
| Downturn Resilience | N/A |
| Operating Performance | Strong |
| Stock Opinion | Relatively Expensive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $4.4 Bil in market cap, OneStream provides a unified, AI-enabled Finance Cloud platform that modernizes and enhances the strategic impact of the Office of the CFO through a scalable, extensible software solution.
[1] Valuation Looks Very High
| OS | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 7.7 | 3.3 |
| Price-to-Earnings Ratio | -53.2 | 23.8 |
| Price-to-Free Cash Flow Ratio | 46.5 | 21.2 |
This table highlights how OS is valued vs broader market. For more details see: OS Valuation Ratios
[2] Growth Is Very Strong
- OneStream has seen its top line grow at an average rate of 24.2% over the last 3 years
- Its revenues have grown 24% from $460 Mil to $571 Mil in the last 12 months
- Also, its quarterly revenues grew 19.5% to $154 Mil in the most recent quarter from $129 Mil a year ago.
| OS | S&P 500 | |
|---|---|---|
| 3-Year Average | 24.2% | 5.6% |
| Latest Twelve Months* | 24.2% | 6.2% |
| Most Recent Quarter (YoY)* | 19.5% | 7.3% |
This table highlights how OS is growing vs broader market. For more details see: OS Revenue Comparison
[3] Profitability Appears Very Weak
- OS last 12 month operating income was $-137 Mil representing operating margin of -24.0%
- With cash flow margin of 16.8%, it generated nearly $96 Mil in operating cash flow over this period
- For the same period, OS generated nearly $-83 Mil in net income, suggesting net margin of about -14.5%
| OS | S&P 500 | |
|---|---|---|
| Current Operating Margin | -24.0% | 18.8% |
| Current OCF Margin | 16.8% | 20.5% |
| Current Net Income Margin | -14.5% | 13.1% |
This table highlights how OS profitability vs broader market. For more details see: OS Operating Income Comparison
[4] Financial Stability Looks Very Strong
- OS Debt was $18 Mil at the end of the most recent quarter, while its current Market Cap is $4.4 Bil. This implies Debt-to-Equity Ratio of 0.4%
- OS Cash (including cash equivalents) makes up $654 Mil of $949 Mil in total Assets. This yields a Cash-to-Assets Ratio of 68.9%
| OS | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 0.4% | 20.2% |
| Current Cash-to-Assets Ratio | 68.9% | 7.2% |
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