Outset Medical (OM – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Josh Jennings from TD Cowen maintained a Buy rating on the stock and has a $15.00 price target.
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Josh Jennings has given his Buy rating due to a combination of factors that highlight Outset Medical’s strong financial performance and growth potential. The company’s first-quarter revenue of $29.8 million exceeded expectations, surpassing the Street target of $27.8 million, and demonstrated solid year-over-year and sequential growth. This performance was driven by robust sales in both consoles and consumables/services, indicating a healthy demand for Outset Medical’s products.
Furthermore, Outset Medical maintained its full-year guidance, projecting revenue between $115 million and $125 million, with a gross margin in the high 30s and cash usage under $50 million. The company also reported a significant improvement in recurring revenue from the sale of Tablo cartridges and services, which saw a 20% increase over the previous year. Additionally, the non-GAAP gross margin improved to 37.6%, and the company made notable progress toward profitability by reducing net cash used for operating activities by 44% year over year. These positive financial indicators support the Buy rating given by Josh Jennings.
Based on the recent corporate insider activity of 46 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of OM in relation to earlier this year.