OneStream Drops 2.48% Amid Citi Target Hike, Earnings Await

OneStream(OS) shares fell 0.64% today, marking the second consecutive day of decline, with a total drop of 2.48% over the past two days. The stock price hit its lowest level since May 2025, experiencing an intraday decline of 0.80%.

The strategy of buying OS shares after they reach a recent low and holding for one week resulted in no return over the past five years. The strategy had a CAGR of 0.00% and an excess return of -28.97%, underperforming the benchmark significantly. Additionally, the strategy had a maximum drawdown of 0.00% and volatility of 0.00%, indicating a risk-averse approach but failing to capitalize on broader market gains.

Citi recently adjusted its price target for OneStream, raising it from $27 to $29 while maintaining a Neutral rating. This adjustment comes ahead of the company's upcoming second-quarter earnings report, with current low expectations making the estimates seem attainable. This move by Citi reflects a cautious optimism about OneStream's near-term performance, which could influence investor sentiment and stock price movements.

OneStream reported a 24% revenue growth in the first quarter of 2025, driven by a strong free cash flow margin of 26%. Subscription revenue saw a significant 31% year-over-year increase, indicating robust demand for the company's services. Additionally, international business revenue grew by 40% year-over-year, highlighting successful global expansion efforts. These positive developments suggest that OneStream is effectively capitalizing on market opportunities and expanding its customer base.

Despite these achievements, OneStream faces several challenges that could impact its stock price. License revenue decreased by 40% due to customer fast conversions, which could be a concern for investors. Broader market uncertainties, including potential deal headwinds and downsells, pose additional risks. The ongoing transition of customers to SaaS models is also negatively impacting license revenue. Furthermore, the challenging macroeconomic environment is causing some companies and government agencies to slow or pause spending, which could affect OneStream's future performance. Despite strong current results, there is a cautious outlook for the rest of the year due to potential demand issues.