Brokerages initiate coverage on KKR-backed financial software firm OneStream
19/08/2024 11:07
** Brokerages J.P. Morgan, Piper Sandler and BTIG initiate
coverage on financial software maker OneStream OS.O and expect
its sticky business model and improving margins to generate
industry-leading growth
** OneStream, backed by private equity firm KKR, debuted on
Nasdaq on July 24 and surged nearly 30% on that day on optimism
for new listings in the hopes of a soft landing for the U.S.
economy
** BTIG initiates coverage with a 'buy' rating and $37 PT
saying that OS is "the new gold standard of Office of the CFO
software"; adds it sees a path to more than 20% free cash flow
margins in the next few years
** Piper Sandler and J.P. Morgan both initiate coverage with
'overweight' rating and PT of $32 and $30, respectively
** Piper Sandler sees a path for a four-fold increase in
annualised recurring revenue (ARR) over the next several years
due to replacement opportunities of aging/legacy installed
financial software
** Brokerage adds OS has an attractive business model with
low churn, durable growth and improving free cash flow margins
** As of last close, stock up 6.9% since debut
(Reporting by Gokul Pisharody in Bengaluru)
((Gokul.Pisharody@thomsonreuters.com;))