Sell OneStream (OS)
We’re going to let go of financial software company OneStream (OS) today since I think the stock will be in the penalty box for several months following a decent Q4 report (revenue beat expectations by 3%) but mediocre forward guidance. Management seems to be aiming for around 20% revenue growth this year, somewhat dashing market hopes/expectations that the company would be in the mid-20% range.
Management cited some delays in locking down deals (macro uncertainty, tariffs, regulations and reporting requirements) as well as foreign exchange headwinds (32% of revenue comes from overseas) as driving the seemingly conservative outlook.
It’s worth noting that OS isn’t the only stock suffering. Financial software company Blackline (BL) also had a rough reaction to its report, in part due to delayed deals. And Bill.com (BILL) suffered a similar fate late last week.
While it’s tempting to view the current pullback as a buying opportunity, I’m just not sure a potential recovery will come quickly enough for the stock to make it worth it, relative to other opportunities out there. Therefore, it’s time to say goodbye to OS. I’ll keep an eye on it for potential inclusion in the future. SELL
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