Cloud And AI Trends Will Spark A Super-Cycle In Finance

Key Takeaways

• OneStream's AI-driven platform, rapid SaaS adoption, and innovative architecture position it for sustained growth, larger deal sizes, and industry-wide marketplace leadership.
  
• Unique access to enterprise financial data and regulatory readiness enable deeper customer integration, high-value subscriptions, and outsized global and public sector expansion.
  
• Advancing AI, rising competition, and regulatory pressures threaten product differentiation, pricing power, and margin sustainability while market consolidation challenges future growth and relevance.

Catalysts

OneStream, Inc. delivers a unified, AI-enabled, and extensible software platform in the United States and internationally.

• Analysts broadly agree that OneStream is well positioned to capture share as enterprises replace legacy systems, but the current narrative underestimates just how early this replacement cycle is-OneStream's rapid SaaS conversion, uniquely fast implementation via CPM Express, and record-setting customer and pipeline growth set the company up for a "super-cycle" of accelerating new bookings and expanding subscription revenues for many years to come.
  
• Analyst consensus highlights rising AI-driven demand, but current expectations do not fully factor in the game-changing monetization potential of OneStream's fully integrated SensibleAI platform, which is seeing over 60 percent growth in AI bookings and rapidly expanding use cases that should drive a sustained step-change in both average deal size and software gross margins, not just incremental improvement.
  
• OneStream's Genesis plug-and-play architecture has barely begun to unlock new revenue streams-by enabling rapid third-party development and industry-specific solutions, Genesis will accelerate marketplace adoption, promote higher ARPU, and establish OneStream as the financial "operating system" for the enterprise, with compounding effects on top-line growth and gross margins.
  
• The company's privileged access to highly curated and auditable enterprise financial and operational data uniquely positions OneStream as the de facto platform for advanced agentic AI; as global regulatory, audit, and ESG pressures intensify, this data advantage will drive enterprise-critical upsells and stickier, higher-value multi-module subscriptions, improving long-term net revenue retention.
  
• International revenue is already growing at over 30 percent year-over-year and only beginning to contribute, but with multi-year investments, FedRAMP High certification enabling deep U.S. public sector penetration, and vertical "Express" offerings, OneStream is poised for outsized global expansion and public sector wins that could double non-U.S. and public sector mix, meaningfully lifting revenue, profitability, and earnings stability for the long term.

OneStream Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on OneStream compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming OneStream's revenue will grow by 20.8% annually over the next 3 years.
• Even the bullish analysts are not forecasting that OneStream will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate OneStream's profit margin will increase from -42.4% to the average US Software industry of 13.4% in 3 years.
• If OneStream's profit margin were to converge on the industry average, you could expect earnings to reach $128.8 million (and earnings per share of $0.43) by about August 2028, up from $-231.2 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 106.8x on those 2028 earnings, up from -17.0x today. This future PE is greater than the current PE for the US Software industry at 36.0x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.44%, as per the Simply Wall St company report.

OneStream Future Earnings Per Share Growth

Risks

• The rapid advancement of AI and automation threatens to commoditize core FP&A functionality, which may erode OneStream's product differentiation and ability to maintain premium pricing, likely placing long-term pressure on gross margins and reducing pricing power.
  
• Intensifying price competition in the maturing enterprise performance management software market, as well as customers shifting to more cost-effective SaaS models and the introduction of the lower-cost CPM Express, could drive down per-customer revenue and weigh on both revenue growth and net margins.
  
• OneStream's heavy investment in R&D and sales to keep pace with evolving technology-including embedding advanced AI, supporting new use cases, and rapid productization-risks pressuring net margins and limiting free cash flow generation if innovation fails to consistently translate into strong incremental revenue.
  
• Growing global regulatory scrutiny and increasingly complex compliance obligations regarding data privacy, localization, and security (especially in cross-border cloud deployments) could increase compliance costs and slow OneStream's international expansion, constraining future revenue growth.
  
• The industry trend toward consolidation among software vendors, as well as the rising demand for unified business intelligence and data platforms, could reduce the appetite for specialized or point finance solutions like OneStream, threatening long-term market share and recurring revenues if large suite vendors successfully absorb key features into broader offerings.

Valuation

• The assumed bullish price target for OneStream is $36.31, which represents two standard deviations above the consensus price target of $29.26. This valuation is based on what can be assumed as the expectations of OneStream's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $38.0, and the most bearish reporting a price target of just $23.0.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $961.1 million, earnings will come to $128.8 million, and it would be trading on a PE ratio of 106.8x, assuming you use a discount rate of 8.4%.
• Given the current share price of $21.15, the bullish analyst price target of $36.31 is 41.7% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.