Is OneSpan Inc. (OSPN) the Best Cybersecurity Stock to Invest in Under $20?
We recently published a list of 10 Best Cybersecurity Stocks to Invest in Under $20. In this article, we are going to take a look at where OneSpan Inc. (NASDAQ:OSPN) stands against other best cybersecurity stocks to invest in under $20.
The cybersecurity sector is at a tipping point, driven by growing cyber threats, breakthrough technologies such as AI and IoT, and a renewed focus on national security and digital infrastructure. Despite a well-documented talent scarcity and evolving geopolitical concerns, the industry continues to grow rapidly, creating an ideal environment for innovation and investment.
According to Fortune Business Insights, the worldwide cybersecurity industry was valued at $172.24 billion in 2023 and is expected to reach $562.72 billion by 2032, expanding at a CAGR of 14.3%. North America, notably the United States, dominates this environment, driven by the growth of e-commerce platforms, increased digital adoption in industries such as BFSI and healthcare, and greater consumer awareness. Cloud computing, AI, machine learning, and IoT technologies are now at the forefront of current cybersecurity solutions, allowing enterprises to identify and prevent digital breaches in real time.
However, as technology advances, so do the hazards. McKinsey’s November 2024 report underlines the critical need to make AI systems more secure, advising cybersecurity providers to focus on the dual problem of protecting both their own AI models and those used by their clients. Generative AI and third-party integrations provide new attack surfaces, necessitating the use of smarter, more adaptive protection technologies.
The need is further heightened by significant policy developments. According to WIRED, former President Trump slapped punitive tariffs on technology imports, sending shockwaves across the semiconductor and e-commerce sectors. While some tech businesses may profit from increased demand for logistics and supply chain management technologies, others, such as major tech giants, saw their stock prices fall sharply due to concerns about inflation and disrupted trade routes. Tariffs on goods from China and other significant nations may boost consumer prices and limit the supply of critical cybersecurity components, particularly for cloud and data center operators.
In the meantime, firms’ stakes are still rising. Nearly half of American businesses have experienced significant revenue losses as a result of data breaches, according to Arcserve and IBM. In 2024, the average cost of a breach was close to $4.9 million; when events took more than 200 days to identify, the cost increased to $5.5 million. The threat surface is growing due to generative AI, and just 40% of SaaS services are actively monitored for security, further taxing already overworked security teams.
According to Forbes, there is a paradox in the workforce, despite a 4.8 million cybersecurity expert deficit worldwide, thousands of competent IT workers are still underutilized as a result of strict recruiting practices and a lack of investment in local talent development. While degrees and certifications are still important, practical experience gained through laboratories, bug bounty programs, or internships has emerged as the key differentiator.
When combined, these patterns point to a fundamental transformation of the cybersecurity sector as well as an increase in demand for cybersecurity services. Cybersecurity firms that can innovate at scale while navigating governmental changes and global uncertainties are being keenly watched by investors, particularly those keeping an eye on high-growth tech industries.
In order to find the Best Cybersecurity Stocks to invest in under $20, we started by searching for companies working in the cybersecurity sector using the Finviz stock screener, applying a price filter to include just those trading below $20 per share. Following the compilation of the list, we used Insider Monkey’s hedge fund holdings database to analyze hedge fund sentiment for each stock. Next, we arranged the stocks according to the number of hedge funds that owned each one in ascending order, as per Insider Monkey’s database of Q4 2024. The final list consists of cybersecurity stocks under $20 that are currently overlooked by institutional investors, perhaps representing discounted chances in a quickly changing field.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is OneSpan Inc. (OSPN) the Best Cybersecurity Stock to Invest in Under $20?
An executive in a meeting room surrounded by digital screens discussing data security requirements.
Share Price: $15.44
Number of Hedge Fund Holders: 25
Thanks to major operational enhancements and strategic initiatives, OneSpan Inc. (NASDAQ:OSPN) is establishing a solid reputation in the fields of cybersecurity and digital identification. OneSpan, headquartered in Boston, provides digital workflow, security, authentication, and identity solutions throughout Asia-Pacific, EMEA, and the Americas.
OneSpan Inc. (NASDAQ:OSPN) achieved a record adjusted EBITDA of $73 million, or 30% of revenue, in fiscal year 2024, which concluded on December 31, 2024. This achievement demonstrated the company’s effective shift to higher-margin software and services. ARR (annual recurring revenue) increased 8.5% to $168 million, driven by 6% growth in security and 12% growth in digital agreements.
Subscription income increased more than 30%, accounting for 57% of total revenue. The strategic shift away from lower-margin hardware, while having a minor influence on total sales growth, significantly increased profitability and operational efficiency. OneSpan generated $56 million in operating cash flow and ended the year with $83 million in cash and no long-term debt, which shows that the company is well-positioned for future investments and shareholder returns.
Operationally, both the Security and Digital Agreements divisions were profitable during the year. With a new CTO who specializes in digital identity, OneSpan is strengthening its R&D skills to maintain its leadership in authentication and e-signatures. OneSpan Inc. (NASDAQ: OSPN) stands out as one of the best cybersecurity stocks under $20, providing an appealing mix of growth, profitability, and shareholder returns.
Overall, OSPN ranks 4th on our list of best cybersecurity stocks to invest in under $20. While we acknowledge the potential of OSPN, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than OSPN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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