OneSpan (NasdaqCM:OSPN) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

OneSpan Inc. (NasdaqCM:OSPN) is scheduled to report Q3 earnings results after markets close for trading on November 2, 2020.

The company is expected to report earnings of $0.05/share on revenue of $58.646 million. The consensus earnings per share (EPS) of $0.05/share is based on a poll of 5 analysts and represents a decline in eps of −86.1% over the same quarter last year, when the company reported earnings of $0.36/share.

The revenue forecast of $58.646 million based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −26.4%. Last year the company reported $79.725 million in revenue for the quarter.

Expected to report EPS contraction of −86.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $58.65 $79.72 −26.4%
EPS $0.05 $0.36 −86.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, and missed expectations 4 quarters.

What are your expectations from OneSpan Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.04 $0.02 −47.4% Missed
Q1, 2020 -$0.03 $0.08 390.9% Beat
Q4, 2019 $0.17 $0.24 39.1% Beat
Q3, 2019 $0.15 $0.36 143.2% Beat
Q2, 2019 $0.05 $0.01 −78.6% Missed
Q1, 2019 $0.04 -$0.07 −259.1% Missed
Q4, 2018 $0.08 $0.17 112.5% Beat
Q3, 2018 $0.07 $0.04 −46.7% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −37.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 11, 2020 $29.91 $18.84 −37.0% Decline
May 5, 2020 $16.20 $19.05 17.6% Increase
March 3, 2020 $16.74 $18.50 10.5% Increase
October 29, 2019 $15.48 $19.43 25.5% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.96, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.96 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

OneSpan Inc. is currently trading at $23.28/share, down −2.1% for the day. The company is trading at approximately 69.8% of its 52-week high of $33.33/share. The company’s stock price is up 23.6% since the last earnings report and down −6.4% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 49.46 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqCM:OSPN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 61.06 and a forward P/E multiple of 85.80.

OneSpan Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.64. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $23.28
P/E Ratio 61.1x
P/E Ratio (Fwd) 85.8x
PEG Ratio 0.2
Total Debt / Total Capital 1.5%
Levered Free Cash Flow $36.787 million
EV / EBITDA 28.5x

Finbox

OneSpan Inc. is a small-cap stock with a market capitalization of $936.4 million and a total enterprise value of $839.9 million. The company operates in the Information Technology sector and the Software industry.

OneSpan Inc., together with its subsidiaries, designs, develops, and markets digital solutions for identity, security, and business productivity worldwide. The company offers Trusted Identity Platform, a cloud-based platform to secure users, devices, and transactions across the digital journey; Intelligent Adaptive Authentication, a cloud-based solution that enables banks and other financial institutions to secure users, devices, and transactions; and Risk Analytics, a comprehensive anti-fraud solution. It also provides Secure Agreement Automation, a cloud-based solution that helps digitize the mobile and online application process; Mobile Security Suite, a software development kit; Mobile Authenticator Studio, a mobile authenticator that operates as a discrete mobile application; and OneSpan Sign, which supports a range of e-signature requirements from simple to complex. In addition, the company offers DIGIPASS hardware authenticators that supports authentication and digital signatures for applications running on PCs, tablets, and mobile phones; and authentication servers that enables customers to administer a high level of access control. It sells its solutions through its direct sales force, as well as through distributors, resellers, systems integrators, and original equipment manufacturers. The company was formerly known as VASCO Data Security International, Inc. and changed its name to OneSpan Inc. in May 2018. OneSpan Inc. was founded in 1991 and is headquartered in Chicago, Illinois.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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