Wall Street analysts are optimistic about OneSpan (OSPN), but should you invest?
Chicago: Investors often look to Wall Street analysts for guidance on whether to buy, sell, or hold stocks. But do these recommendations really matter? Let’s dive into what analysts are saying about OneSpan (OSPN) and how to use their insights wisely.
Currently, OneSpan has an average brokerage recommendation of 1.80, which is pretty close to a Strong Buy. This rating comes from five different brokerage firms, with three of them giving it a Strong Buy. So, it sounds promising, right?
However, just because the analysts are optimistic doesn’t mean you should jump in without thinking. Studies show that these recommendations don’t always lead to the best investment choices. Sometimes, brokerage firms have their own interests at heart, which can skew their ratings.
For instance, research indicates that for every “Strong Sell” rating, there are about five “Strong Buy” ratings. This suggests that analysts might not always have retail investors’ best interests in mind. It’s smart to use their recommendations to back up your own research instead.
One tool that can help is the Zacks Rank, which rates stocks based on earnings estimate revisions. This method has a solid track record and can give you a clearer picture of a stock’s potential. So, if you’re considering OneSpan, checking its Zacks Rank alongside the average brokerage recommendation could be a good strategy.
It’s important to note that while both the ABR and Zacks Rank use a scale from 1 to 5, they measure different things. The ABR is based solely on analyst recommendations, while the Zacks Rank focuses on earnings estimates, which can be more reliable for predicting stock performance.
Looking at OneSpan’s earnings estimates, the consensus for this year is steady at $1.34. This stability might mean the stock will perform similarly to the market in the near future. Currently, OneSpan holds a Zacks Rank of #3, which is a Hold. So, while the ABR suggests a Buy, it might be wise to tread carefully.
In summary, while Wall Street is optimistic about OneSpan, it’s essential to do your own homework and consider multiple factors before making any investment decisions.
