OneSpan Inc (NASDAQ:OSPN), a software company based in United States, received a lot of attention from a substantial price increase on the NasdaqCM over the last few months. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on OneSpan’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for OneSpan
What’s the opportunity in OneSpan?The stock is currently trading at US$20.70 on the share market, which means it is overvalued by 85.92% compared to my intrinsic value of $11.13. This means that the opportunity to buy OneSpan at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since OneSpan’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from OneSpan?Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With revenues expected to grow by a double-digit 19.98% over the next couple of years, the outlook is positive for OneSpan. If the level of expenses is able to be maintained, it looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in OSPN’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe OSPN should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on OSPN for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for OSPN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on OneSpan. You can find everything you need to know about OneSpan in the latest infographic research report. If you are no longer interested in OneSpan, you can use our free platform to see my list of over 50 other stocks with a high growth potential.