Cybersecurity firm OneSpan surges on strong annual revenue forecast

(Reuters) -Shares of OneSpan rose 19% to near seven-month highs on Thursday after the company forecast upbeat full-year revenue and reported quarterly profit above expectations, fanning optimism among investors about healthy demand for cybersecurity services.

The Boston, Massachusetts-based company's larger peer Crowdstrike also forecast annual results above market estimates, which had sparked a rally in cybersecurity stocks last week.

OneSpan forecast revenue between $238 million and $246 million for fiscal 2024, compared with analysts' average estimate of $239.65 million.

"We ended the year on a high note led by strong operational rigor and accelerated cost reduction actions over the second half of 2023," said OneSpan interim CEO Victor Limongelli, who took over the role in January.

OneSpan reported an adjusted per-share profit of 19 cents for the fourth quarter, topping expectations of 3 cents, according to LSEG data.

The company, which offers a range of digital identity and anti-fraud solutions, also said it had cut headcount by 5% in the quarter.

Brokerage D.A. Davidson raised its price target on the company's stock to $12 from $9.5.

Reuters had reported last year that OneSpan, which had become the target of activist hedge funds such as Legion Partners Asset Management, was exploring options including a sale.

Two of the four analysts covering the stock rate it "buy" or higher and the remaining two "hold". They have a median target price of $12.

(Reporting by Priyanka.G in Bengaluru; Editing by Tasim Zahid and Maju Samuel)