Every Cloud Transformation Has A Silver Lining: An Overlooked Tech Play
OneSpan (OSPN) is a leading cybersecurity enterprise trusted by 60% of the world's top 100 banks but is currently in that awkward transformation phase to the cloud, catalyzing adverse price...
OneSpan OSPN is a leading cybersecurity enterprise trusted by 60% of the world's top 100 banks but is currently in that awkward transformation phase to the cloud. This is an expensive but necessary process for any software-based enterprise and is something that has kept tech giants like Adobe ADBE and Microsoft MSFT both successfully underwent, resulting in incredible growth resurgence, margin enhancement, and valuation multiple expansion.
If OneSpan can successfully transition its platform to the cloud, this leading digital financial security enterprise should exhibit the same benefits as MSFT & ADBE. The current cloud-powered operational shift is not the only growth driving innovation in OneSpan's pipeline. The company has a broad portfolio of platforms, which continues to grow, with key patent differentiation that makes it indispensable. The company recently launched an AI-powered risk analytics platform focused on ridding the financial sector of fraud.
The enterprise is working to establish itself as a one-stop shop for all financial institution's digital security needs in this increasingly vulnerable digital economy we live in.
OSPN has recently fallen under pressure with its cloud transformation weighing heavily on its short-term profitability, which has presented us with an excellent entry point. There is elevated uncertainty regarding OneSpan's ability to profitably transition its business model. Yet, with 60% subscription growth and reoccurring revenue making up 55% of the topline (from 42% a year prior), I see a very bright future for this stock as it adapts to the commencing 4th Industrial Revolution.
I like this stock as a buy today, with the few covering analysts are giving this under-the-radar equity massive upside price targets between $30 and $40 a share, representing 50%+ and 100%+ upsides, respectively.
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