Outset Medical: Stabilizing Execution, Improving Margins, and Balanced 2026 Outlook Support Buy Rating Despite Lower Target

TD Cowen analyst Josh Jennings maintained a Buy rating on Outset Medical yesterday and set a price target of $12.00.

Josh Jennings has given his Buy rating due to a combination of factors that indicate Outset Medical is stabilizing and executing more predictably after a difficult prior quarter. Fourth-quarter revenue landed at the top of management’s revised range and slightly ahead of consensus, with especially solid performance in console placements and a quarter‑over‑quarter rebound in consumables that points to healthier, more consistent utilization trends.

Jennings also highlights improving profitability metrics, as gross margins expanded meaningfully year over year for both product and service lines, even while absorbing some manufacturing inefficiencies. In addition, management’s initial 2026 revenue growth outlook of 5% to 9% sits around the consensus expectation and is viewed as appropriately calibrated, and the company’s cash position and moderated cash burn support sufficient liquidity to execute on its plan, together underpinning a positive risk‑reward at the current valuation and justifying a Buy rating despite a lower price target.

According to TipRanks, Jennings is a 4-star analyst with an average return of 3.0% and a 46.89% success rate. Jennings covers the Healthcare sector, focusing on stocks such as Boston Scientific, Abbott Laboratories, and TransMedics Group.