ONESPAN INC (NASDAQ:OSPN) – A GARP Candidate Worth Considering

ONESPAN INC (NASDAQ:OSPN) emerged from our Peter Lynch-inspired screen as a potential fit for long-term investors seeking growth at a reasonable price. The company, which provides security solutions for digital transactions, demonstrates strong profitability, financial health, and an attractive valuation relative to its growth prospects.

Key Strengths

• Earnings Growth: OSPN has delivered an impressive 19.39% average annual EPS growth over the past five years, aligning with Lynch’s preference for sustainable but not excessive growth.
• Profitability: With a Return on Equity (ROE) of 25.15%, the company ranks above 89% of its software industry peers, indicating efficient use of shareholder capital.
• Valuation: The stock trades at a P/E ratio of 13.15, below both the industry average (69.85) and the S&P 500 (27.45). Its PEG ratio of 0.68 (based on past growth) suggests it is undervalued relative to its earnings trajectory.
• Financial Health: OSPN carries no debt, a rare and positive trait. Its current ratio of 1.96 reflects solid liquidity, ensuring it can meet short-term obligations comfortably.

Fundamental Overview

Our analysis assigns OSPN a fundamental rating of 6 out of 10, with standout scores in profitability (7) and health (7). The company’s margins are strong, with a 24.05% profit margin outperforming 92% of industry peers. While revenue growth has been modest, earnings have expanded significantly, and future revenue is expected to accelerate slightly.

For a deeper dive, review the full fundamental report.

Our Peter Lynch Strategy screener lists more stocks meeting these criteria and is updated regularly.

Disclaimer

This is not investing advice. The observations here are based on data at the time of writing, and investors should conduct their own research before making decisions.