OneSpan (OSPN), mcap=$480m, price $12 vs $11

– Small-cap SaaS provides authentification solutions for financial institutions.
– The decline in legacy business has been masking 30%+ growth on the digital signature side.
– In addition, a shift from permanent to term licenses has further muted topline growth, despite ARR growing at a healthy 20%+ with 115%+ net retention.
– New CEO (hired after former management was pushed out by activists in 2021) with a track record of revitalizing security software business and comp incentive to reach $30/share or sell the company.

Valuation: Trades at 12x 2025 EBITDA assuming 10-12% revenue CAGR (with 20%+ ARR growth) and reaching 8-10% EBITDA margins. Unprofitable at the moment.

Exp. gain: 20%+ 5-year IRR.

Full OSPN write-up (free guest account required):

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