JPMorgan Starts OneStream Inc. (OS) at Overweight

JPMorgan analyst Mark Murphy initiates coverage on OneStream Inc. (NASDAQ: OS) with a Overweight rating and a price target of $30.00.

The analyst comments "We are initiating coverage of OneStream with an OW rating and $30 Dec-24 price target. As a leading software platform provider which helps transform the Office of the CFO, OneStream has rapidly gained a strong reputation with its modern, cloud-based products primarily used for Budgeting/Planning/Forecasting and Financial Close & Consolidation. OneStream’s solution sits atop a multitude of ERP, HCM, CRM, data warehouse and other systems, ingesting data to provide a single, unified pane of glass to which finance and accounting teams pivot as a single source of truth. Customers have told us that OneStream becomes their “book of record” and that it provides a “rock-solid dataset.” In turn, companies enhance their ability to produce budgets, track their spending, and predict the future in a collaborative manner, using input from different departments (Sales, Purchasing, HR etc) to create a more accurate forecast. OneStream automates repetitive tasks, saves time, and reduces errors as it rolls up data from diverse transactional systems, converts currencies, and produces a company’s three core financial statements and 10Q / 10K filings. Our fundamentally positive view is rooted in the following merits: 1) Stickiness, with 98% gross retention on par with ServiceNow; 2) Cohesive/organic platform, creating a foundation for rapid enhancement; 3) Platform Consolidator, replacing 2-6 legacy systems at deployment; 4) ERP Product replacement cycle catalysts, as Oracle de-supports older Hyperion versions and SAP has announced its BPC product end-of-life; 5) Difficult problem to solve, spanning Planning/Consolidation for the largest F500 companies; and 6) Solid Growth with FCF generation. OS shares have appreciated ~60% from their original IPO filing range midpoint of $18, and ~44% from the final IPO price of $20. OneStream provided flash Q2 results, exceeding its prior forecast, and thus our model reflects a prelim Q2 P&L update and factors the beat into our P&L forecast. Another consideration is that Q3 presents an anomalous, difficult prior-year comp due to an unusually massive 3Q:23 deal with a US Defense agency. So rather than expecting a beat and raise with acceleration when the company reports its Q2 results, we believe this upcoming update presents an atypical situation of a Q2 flash numbers recap while entering an anomalous Q3 growth setup."

For an analyst ratings summary and ratings history on OneStream Inc. click here. For more ratings news on OneStream Inc. click here.

Shares of OneStream Inc. closed at $28.71 yesterday.

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