Outset Medical (OM) AI Stock Analysis

• Market Cap: $243.82M
• Dividend Yield: N/A
• Average Volume (3M): 293.53K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.81
• Revenue Growth: 2.47%
• EPS Growth: 56.93%
• Country: US
• Employees: 354
• Sector: Healthcare
• Sector Strength: 49
• Industry: Medical - Devices
• EPS (TTM): -0.84
• Shares Outstanding: 17,766,193
• 10 Day Avg. Volume: 179,083
• 30 Day Avg. Volume: 293,530
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 2.17
• Enterprise Value/Gross Profit: 5.95
• Enterprise Value/Ebitda: -3.33
• 1Y Price Target: $23.30
• Price Target Upside: 74.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 50 Neutral
• Price Target: $13.50 ▲(1.12% Upside)

Outset Medical's overall stock score is driven by significant earnings call optimism, which is offset by ongoing financial performance challenges and weak technical indicators. The valuation remains a concern due to negative earnings and lack of dividends.

Positive Factors

Earnings

Second-quarter revenue of $31.4M improved 15% y/y and comfortably beat the Street estimate by $2M.

Financial Guidance

OM's increase to full-year revenue guidance – to $122M-$126M from $115M-$125M – reflects confidence that currently strong momentum will continue.

Leadership

Outset Medical announced that Renee Gaeta will be replacing Nabeel Ahmed as Chief Financial Officer, effective today. Ms. Gaeta is considered a strong addition to OM.

Negative Factors

Commercial Strategy

Stranded manufacturing overhead costs were a 230-bp headwind to non-GAAP gross margin in the quarter.

Market Valuation

The new price target uses a lower EV-to-sales multiple of 2.1, which reflects a broader contraction in market valuations for small-cap stocks.

Price Target

The price target for Outset Medical, Inc. has been significantly reduced from $45 to $15.

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 software and connectivity capabilities for dialysis care in acute and home settings. The company was formerly known as Home Dialysis Plus, Ltd. and changed its name to Outset Medical, Inc. in January 2015. Outset Medical, Inc. was incorporated in 2003 and is headquartered in San Jose, California.

How the Company Makes Money

Outset Medical generates revenue primarily through the sale and leasing of its Tablo Hemodialysis System, along with the associated consumables and service contracts. The company also earns income from partnerships with healthcare providers and institutions that utilize their systems. Key revenue streams include the initial sale or lease of the Tablo units, ongoing sales of single-use cartridges and other supplies necessary for the dialysis process, and maintenance service agreements. The company's growth is supported by its focus on increasing adoption of its systems in both acute and chronic care settings, as well as expanding its presence in the home dialysis market.

Outset Medical Financial Statement Overview

Summary

Outset Medical shows modest revenue growth and improved financial stability with reduced leverage. However, significant profitability and cash flow challenges persist, with negative margins and cash flow ratios.

Income Statement

Outset Medical shows a modest revenue growth rate of 3.5% TTM, indicating some positive momentum. However, the company is struggling with profitability, as evidenced by negative net profit margins (-82.1% TTM) and EBIT margins (-67.5% TTM). The gross profit margin has improved to 36.5% TTM, but the persistent negative margins highlight ongoing operational challenges.

Balance Sheet

The balance sheet reflects a significant improvement in financial stability, with a low debt-to-equity ratio of 0.02 TTM, down from 7.53 in the previous year. This indicates reduced leverage and better financial health. However, the return on equity remains negative (-98.1% TTM), suggesting that the company is not yet generating positive returns for shareholders.

Cash Flow

Cash flow analysis reveals challenges, with a negative free cash flow growth rate of -29.3% TTM. The operating cash flow to net income ratio is -1.83 TTM, indicating cash flow issues. Despite a free cash flow to net income ratio of 1.01 TTM, the overall cash flow position remains weak, reflecting the company's struggle to generate positive cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	119.30M	113.69M	130.38M	115.38M	102.60M	49.94M
Gross Profit	43.50M	38.56M	29.00M	17.83M	7.61M	-13.04M
EBITDA	-77.78M	-97.89M	-153.79M	-152.81M	-124.86M	-114.85M
Net Income	-97.90M	-127.98M	-172.80M	-162.96M	-131.94M	-120.70M
Balance Sheet
Total Assets	288.80M	275.80M	313.80M	400.12M	463.46M	403.83M
Cash, Cash Equivalents and Short-Term Investments	184.09M	158.69M	203.32M	287.50M	339.49M	314.87M
Total Debt	3.62M	201.86M	136.19M	103.23M	37.81M	38.60M
Total Liabilities	134.02M	248.98M	190.91M	154.13M	89.38M	75.22M
Stockholders Equity	154.78M	26.82M	122.89M	245.99M	374.08M	328.61M
Cash Flow
Free Cash Flow	-68.39M	-117.22M	-134.81M	-154.05M	-133.37M	-108.12M
Operating Cash Flow	-67.54M	-116.30M	-131.37M	-145.73M	-130.26M	-99.02M
Investing Cash Flow	14.79M	103.94M	83.03M	-66.30M	-142.51M	3.95M
Financing Cash Flow	54.45M	67.87M	43.65M	72.90M	160.15M	385.68M

Outset Medical Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 13.35 is below the 20-day moving average (MA) of 13.51, below the 50-day MA of 16.39, and below the 200-day MA of 14.61, indicating a bearish trend. The MACD of -0.63 indicates Negative momentum. The RSI at 39.20 is Neutral, neither overbought nor oversold. The STOCH value of 42.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OM.

Outset Medical Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELMD	70 Outperform	$199.96M	28.13	17.18%	―	16.97%	48.56%
INGN	60 Neutral	$219.03M	―	-13.46%	―	5.15%	73.29%
CVRX	52 Neutral	$202.15M	―	-92.33%	―	23.11%	18.06%
Sector *	51 Neutral	$7.91B	-0.36	-41.71%	2.23%	23.45%	-1.86%
OM	50 Neutral	$243.82M	―	-87.65%	―	2.47%	56.93%
TLSI	47 Neutral	$257.32M	―	271.41%	―	45.50%	53.07%
LUNG	44 Neutral	$70.49M	―	-66.88%	―	18.24%	4.81%

Outset Medical Corporate Events

Outset Medical Appoints Renee Gaeta as CFO

On June 3, 2025, Outset Medical announced the appointment of Renee Gaeta as Chief Financial Officer, succeeding Nabeel Ahmed. Gaeta brings extensive financial leadership experience from her previous roles at various medical technology companies. Her appointment is expected to support Outset’s growth and profitability goals. The company also reiterated its 2025 financial guidance, projecting revenues between $115 million and $125 million, with a non-GAAP gross margin in the high-30% range. Additionally, Outset held its Annual Meeting of Stockholders on June 2, 2025, where key proposals, including amendments to equity and stock purchase plans, were approved.