12 Most Undervalued Cybersecurity Stocks to Buy According to Hedge Funds

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10) OneSpan Inc. (NASDAQ:OSPN)

Forward P/E as of November 20: ~12.8x

Number of Hedge Fund Holders: 18

OneSpan Inc. (NASDAQ:OSPN) offers software services. It is engaged in designing and developing security software and e-signature solutions that protect devices and financial transactions from fraud and misuse.

Wall Street analysts are optimistic about OneSpan Inc. (NASDAQ:OSPN)’s new solution, VISION FX. This new solution combines OneSpan’s patented CRONTO® transaction signing with FIDO2 protocols, strengthening the protection against phishing and account takeover threats (ATO). The changes in the banking sector related to new digital initiatives have resulted in unprecedented cybersecurity risks.

OneSpan Inc. (NASDAQ:OSPN) highlighted that digital fraud losses from attacks such as ATO are expected to exceed $343 billion globally between 2023 and 2027. Amidst this environment, banks of all sizes require sophisticated methods to protect accounts and transactions.

In Q3 2024, OneSpan Inc. (NASDAQ:OSPN)’s subscription revenue saw an increase of 29% YoY to $33.6 million. Industry experts believe that security subscription revenue is expected to surpass hardware revenue for the first time in 2024. Also, healthy demand for authentication and mobile application products should continue to aid its growth in subscription revenue for security solutions.

The company has made a strategic shift towards higher-margin software revenue and is focused on operational efficiency and profitability. These measures, together with OneSpan Inc. (NASDAQ:OSPN)’s emphasis on growing its partner ecosystem and expected growth in security subscription revenue, should place it well for efficient and profitable revenue growth.

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