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Have you been paying attention to shares of OneSpan (OSPN)? Shares have been on the move with the stock up 7.7% over the past month. The stock hit a new 52-week high of $19.09 in the previous session. OneSpan has gained 74.4% since the start of the year compared to the 33% move for the Zacks Computer and Technology sector and the 39.6% return for the Zacks Internet - Software industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 30, 2024, OneSpan reported EPS of $0.33 versus consensus estimate of $0.21.
Valuation Metrics
OneSpan may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
OneSpan has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 14X current fiscal year EPS estimates, which is not in-line with the peer industry average of 34.7X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 28.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, OneSpan currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if OneSpan meets the list of requirements. Thus, it seems as though OneSpan shares could have potential in the weeks and months to come.
How Does OSPN Stack Up to the Competition?
Shares of OSPN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is AppFolio, Inc. (APPF). APPF has a Zacks Rank of # 2 (Buy) and a Value Score of F, a Growth Score of A, and a Momentum Score of B.