Outset Medical, Inc. (OM)
NASDAQ:OM
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Outset Medical
(NASDAQ:OM)
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Rating:50Neutral
Price Target:
$3.50
▼(-19.54% Downside)
Action:Reiterated
Date:05/09/26
The score is held back primarily by ongoing large losses and negative free cash flow despite improved gross margins and a cleaner balance sheet. Technicals also remain weak with the stock below major moving averages. Offsetting these, the latest earnings call was relatively positive with reaffirmed growth guidance, better margins, and reduced expected cash burn, but execution risk remains due to back-half loading and capital-order variability.
Positive Factors
Margin expansion / unit economics
The company has materially improved unit economics: non‑GAAP gross margins (Q1 43.8%) and product margins (>50%) reflect structural improvements versus earlier years. Stronger gross margins create durable operating leverage as installed base grows and reduce reliance on pricing or heavy volume to progress toward profitability.
Negative Factors
Persistent losses and negative cash flow
Despite margin gains, the business remains deeply unprofitable with large negative net margins and negative operating/free cash flow. Persistent cash burn constrains financial flexibility and could force additional financing if revenue growth or margin expansion slows, lengthening the path to break‑even.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin expansion / unit economics
The company has materially improved unit economics: non‑GAAP gross margins (Q1 43.8%) and product margins (>50%) reflect structural improvements versus earlier years. Stronger gross margins create durable operating leverage as installed base grows and reduce reliance on pricing or heavy volume to progress toward profitability.
Read all positive factors
Outset Medical (OM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$68.88M
Dividend YieldN/A
Average Volume (3M)152.80K
Price to Earnings (P/E)―
Beta (1Y)1.86
Revenue Growth2.01%
EPS Growth85.71%
CountryUS
Employees354
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)-4.16
Shares Outstanding18,537,241
10 Day Avg. Volume224,958
30 Day Avg. Volume152,803
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.44
Price to Sales (P/S)0.47
P/FCF Ratio-1.20
Enterprise Value/Market Cap0.80
Enterprise Value/Revenue0.47
Enterprise Value/Gross Profit1.16
Enterprise Value/Ebitda-0.88
Forecast
1Y Price Target
$7.67Price Target Upside76.25% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)-2.86
Revenue Forecast (FY)$126.77M
Outset Medical Business Overview & Revenue Model
Company Description
Outset Medical, Inc., a medical technology company, develops a hemodialysis system for dialysis. It provides the Tablo Hemodialysis System, which comprises a compact console with integrated water purification, on-demand dialysate production, and s...
How the Company Makes Money
Outset Medical primarily generates revenue by selling and deploying its Tablo Hemodialysis System and associated recurring consumables and services required to run dialysis treatments. Key revenue streams generally include: (1) product revenue fro...
Outset Medical Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call presented a largely positive operational and financial trajectory: substantial gross margin expansion (620 bps), a 32% improvement in non-GAAP net loss, strong cash balance ($161M) with lower-than-expected cash burn, and a strategic next-generation product and experienced commercial hire poised to drive future demand. Offsetting these positives were a 6% year-over-year revenue decline in Q1 driven by lumpiness in capital orders (product revenue down 13%), modestly higher operating expenses, and reliance on the timing and success of the next-gen Tableau launch to deliver back-half revenue. On balance, the positive margin, cash, and operational execution updates outweigh the timing-related revenue headwinds.Positive Updates
Revenue and Guidance Reaffirmed
Q1 revenue of $27.9M and company reaffirmed 2026 revenue guidance of $125M–$130M (a 5%–9% increase over 2025), with majority of growth expected in Q3–Q4.
Negative Updates
Quarterly Revenue Decline and Product Sales Drop
Q1 revenue declined 6% year-over-year to $27.9M from $29.8M. Product revenue fell 13% to $18.6M, and capital sales were $5.4M, reflecting timing variability.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and Guidance Reaffirmed
Q1 revenue of $27.9M and company reaffirmed 2026 revenue guidance of $125M–$130M (a 5%–9% increase over 2025), with majority of growth expected in Q3–Q4.
Read all positive updates
Company Guidance
Outset reaffirmed 2026 guidance of $125–$130 million in revenue (up 5%–9% vs. 2025), noting Q1 revenue of $27.9M (down 6% YoY) with product revenue $18.6M (down 13%), capital sales $5.4M, consumables $13.2M and service & other $9.3M (up 10%); recurring consumables + service revenue was $22.5M and comprises roughly 70% of total revenue. Q2 is expected to be a modest step-up with the majority of the year’s growth in Q3–Q4 (helped by next‑generation Tableau), and full‑year non‑GAAP gross margin is guided to the low‑ to mid‑40% range (Q1 non‑GAAP gross margin was 43.8%, +620 bps YoY; product margin 52.4%, +400 bps; service margin 26.7%, +~1,640 bps), with company aiming toward a 50% company‑wide gross‑margin milestone. Non‑GAAP operating expenses were $25.6M (+~4%), non‑GAAP operating loss was $13.4M (flat YoY) and non‑GAAP net loss improved to $15.4M (‑32% YoY); balance sheet cash was $161M, Q1 cash use was ~$12M, and management now expects full‑year cash use of < $40M (about 15% better than prior expectation).Outset Medical Financial Statement Overview
Summary
Income Statement
22
Negative
Balance Sheet
58
Neutral
Cash Flow
28
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 117.59M | 119.48M | 113.69M | 130.38M | 115.38M | 102.60M |
| Gross Profit | 47.78M | 46.75M | 38.56M | 29.00M | 17.83M | 7.61M |
| EBITDA | -62.73M | -62.37M | -97.89M | -153.79M | -152.81M | -124.86M |
| Net Income | -74.85M | -81.65M | -127.98M | -172.80M | -162.96M | -131.94M |
Balance Sheet | ||||||
| Total Assets | 249.45M | 264.50M | 275.80M | 313.80M | 400.12M | 463.46M |
| Cash, Cash Equivalents and Short-Term Investments | 156.71M | 168.95M | 158.69M | 203.32M | 287.50M | 339.49M |
| Total Debt | 4.68M | 104.52M | 201.86M | 136.19M | 103.23M | 37.81M |
| Total Liabilities | 137.77M | 137.54M | 248.98M | 190.91M | 154.13M | 89.38M |
| Stockholders Equity | 111.69M | 126.95M | 26.82M | 122.89M | 245.99M | 374.08M |
Cash Flow | ||||||
| Free Cash Flow | -34.25M | -47.13M | -117.22M | -134.81M | -154.05M | -133.37M |
| Operating Cash Flow | -33.51M | -46.33M | -116.30M | -131.37M | -145.73M | -130.26M |
| Investing Cash Flow | -11.71M | -97.68M | 103.94M | 83.03M | -66.30M | -142.51M |
| Financing Cash Flow | 348.00K | 55.50M | 67.87M | 43.65M | 72.90M | 160.15M |
Outset Medical Technical Analysis
Negative
4.35
Price Trends
3.97
Negative
4.11
Negative
7.55
Negative
Market Momentum
-0.11
Positive
45.07
Neutral
20.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OM, the sentiment is Negative. The current price of 4.35 is above the 20-day moving average (MA) of 4.18, above the 50-day MA of 3.97, and below the 200-day MA of 7.55, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 45.07 is Neutral, neither overbought nor oversold. The STOCH value of 20.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OM.
Outset Medical Risk Analysis
Outset Medical disclosed 79 risk factors in its most recent earnings report. Outset Medical reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Outset Medical Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $316.63M | 16.00 | 22.14% | ― | 16.79% | 45.17% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
50 Neutral | $68.88M | -0.93 | -55.88% | ― | 2.01% | 85.71% | |
49 Neutral | $170.57M | -5.07 | -12.90% | ― | 3.39% | 19.78% | |
47 Neutral | $118.30M | -1.41 | -47.09% | ― | 15.40% | -25.87% | |
44 Neutral | $157.62M | -4.75 | -120.77% | ― | 11.73% | 8.07% | |
41 Neutral | $34.82M | -1.02 | -77.48% | ― | -7.88% | -5535.71% |
* Healthcare Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.