Is It Time To Reassess OneStream (OS) After Its Recent Share Price Rebound?
- If you are wondering whether OneStream's share price reflects its real worth, you are not alone. This article looks at how the stock stacks up against a few valuation yardsticks.
- OneStream recently closed at US$23.65, with returns of 0.1% over 7 days, 25.8% over 30 days, 33.5% year to date, and a 22.1% decline over the past year, which can hint at shifting expectations around both opportunity and risk.
- Recent coverage has focused on OneStream's position within the software sector and how investors are reacting to its growth story, liquidity profile, and competitive positioning. These themes help explain why the share price has moved sharply over the last month while still sitting below its level a year ago.
- On our valuation checks, OneStream scores 1 out of 6. We will look at what traditional methods like multiples and cash flow estimates say about that, then finish with a more complete way to think about the stock's value that ties everything together.
OneStream scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: OneStream Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model takes estimates of the cash a company could generate in the future, then discounts those cash flows back to today to arrive at an estimated present value per share.
For OneStream, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections expressed in US$. The latest twelve month free cash flow is about $93.2 million. Analyst and extrapolated projections used in the model show free cash flow figures in the low hundreds of millions over the coming years, reaching a projected $354.0 million in 2030 according to the data provided.
Pulling these projections together, the model arrives at an estimated intrinsic value of about $26.72 per share, compared with the recent share price of $23.65. That implies the shares sit at roughly an 11.5% discount to this DCF estimate, which points to the stock looking undervalued on this measure.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests OneStream is undervalued by 11.5%. Track this in your watchlist or portfolio, or discover 873 more undervalued stocks based on cash flows.
Approach 2: OneStream Price vs Sales
For a business where profitability is not the main anchor yet, the P/S ratio is often a useful yardstick because it compares what the market is paying to the revenue the company is already generating.
What investors usually consider a “normal” or “fair” P/S depends on how fast they expect revenue to grow and how risky they think that growth path is. Higher expected growth and lower perceived risk often justify a higher multiple, while slower growth or higher risk tend to point to a lower one.
OneStream currently trades on a P/S of 7.85x. That is above the Software industry average of 4.54x and slightly above the peer group average of 7.76x. Simply Wall St’s Fair Ratio for OneStream is 5.98x, which is its view of what a reasonable P/S would be given factors such as growth outlook, profit margins, industry, market cap and specific risks.
This Fair Ratio aims to be more tailored than a simple peer or industry comparison because it adjusts for those company specific drivers rather than assuming every software stock deserves the same multiple. Comparing 7.85x to the Fair Ratio of 5.98x suggests OneStream screens as overvalued on this measure.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your OneStream Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce Narratives, which are simply your story about a company, tied to your own fair value, revenue, earnings and margin assumptions.
A Narrative connects three pieces in one place: the business story you believe in, the financial forecast that flows from that story, and a fair value estimate that drops out of those numbers.
On Simply Wall St, millions of investors build and share Narratives on the Community page, where you can quickly compare different fair values to the current share price to help decide whether a stock looks appealing to you or not.
Because Narratives sit on live data, they update automatically when fresh information like news or earnings is added, and for OneStream that could mean one investor sets a relatively high fair value based on stronger revenue and margin assumptions, while another uses more conservative inputs and lands on a much lower figure.
Do you think there's more to the story for OneStream? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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