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Outset Medical (OM)
NASDAQ:OM
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Outset Medical
(NASDAQ:OM)
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Rating:43Neutral
Price Target:
$4.00
▼(-14.35% Downside)
Outset Medical's overall stock score is primarily impacted by its financial performance and technical analysis. The company shows strong revenue growth but faces challenges in profitability and cash flow. Technical indicators suggest bearish momentum, and valuation metrics are weak due to ongoing losses. The earnings call provided some positive insights but also highlighted significant challenges.
Positive Factors
Revenue Growth
The increase in Tablo console sales indicates growing demand and market penetration, which can drive long-term revenue growth and strengthen market position.
Improved Margins
Improved gross margins suggest better cost management and operational efficiency, enhancing profitability potential over the long term.
Strong Cash Position
A strong cash position provides financial flexibility to invest in growth opportunities and weather economic uncertainties, supporting long-term stability.
Negative Factors
Leadership Changes
Leadership changes can disrupt sales execution and strategic continuity, potentially affecting revenue growth and market strategy in the medium term.
Revenue Guidance Revision
Lowered revenue guidance reflects challenges in achieving expected growth, which may impact investor confidence and strategic planning.
Deal Closing Challenges
Delays in closing deals can lead to revenue unpredictability and hinder cash flow, affecting financial planning and operational execution.
Outset Medical (OM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$78.69M
Dividend YieldN/A
Average Volume (3M)435.15K
Price to Earnings (P/E)―
Beta (1Y)1.55
Revenue Growth4.65%
EPS Growth68.71%
CountryUS
Employees354
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)-0.69
Shares Outstanding18,153,090
10 Day Avg. Volume417,388
30 Day Avg. Volume435,147
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)2.15
Price to Sales (P/S)0.51
P/FCF Ratio-0.49
Enterprise Value/Market Cap2.77
Enterprise Value/Revenue1.81
Enterprise Value/Gross Profit4.81
Enterprise Value/Ebitda-3.12
Forecast
1Y Price Target
$11.75Price Target Upside151.61% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)-2.66
Revenue Forecast (FY)$127.40M
Outset Medical Business Overview & Revenue Model
Company DescriptionOutset 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 MoneyOutset Medical generates revenue primarily through the sale of its Tablo Hemodialysis Systems, which are sold to hospitals, clinics, and other healthcare facilities. In addition to system sales, the company earns revenue from the consumables required for the Tablo system, such as dialysate and other necessary supplies. This creates a recurring revenue stream as facilities need to continuously purchase these consumables for ongoing patient treatments. The company may also engage in partnerships with healthcare providers and payers, enhancing its market reach and potentially securing additional funding or reimbursement arrangements that further support its revenue generation. Overall, Outset Medical's business model hinges on both the initial sale of its dialysis systems and the ongoing sale of related consumables, supplemented by strategic partnerships that bolster its market position.
Outset Medical Earnings Call Summary
Earnings Call Date:Nov 10, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 17, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook for Outset Medical. While there were positives such as increased console sales, improved gross margins, and a strong cash position, the company faced challenges with revenue growth, leadership changes, and deal closing timing. The uncertainty about future sales leadership and the revision of revenue guidance contributed to a cautious outlook.Q3-2025 Updates
Positive Updates
Increase in Tablo Console Sales
Tablo console sales increased by 8% in the third quarter, reflecting growing hospital demand and an expanded sales pipeline with opportunities increasing in size by more than 20%.
Improved Gross Margin
Non-GAAP gross margin expanded by 350 basis points year-over-year, reaching 39.9%, with product gross margin increasing to 45.7% and service margin more than doubling to 24.8%.
Strong Cash Position and Reduced Cash Use
Ended the quarter with $182 million in cash and a significant reduction in cash use by more than 50% from 2024, projecting less than $50 million used in 2025.
Positive Clinical Outcomes
Presented three new data sets at the Annual Kidney Week Conference, including a 94% reduction in serious cardiac or respiratory events and a sustained reduction in infections at AdventHealth.
Negative Updates
Revenue Growth Below Expectations
Third quarter revenue was $29.4 million, representing only 3% growth year-over-year, leading to a revision of 2025 revenue guidance from $122-126 million to $115-120 million.
Head of Sales Resignation
The resignation of the Head of Sales, which could lead to internal disruption and impact sales execution in the fourth quarter.
Challenges in Deal Closing
Several large deals expected to close in Q3 shifted to Q4 and into 2026, affecting the ability to predict deal timing and close deals consistently.
Order Timing Discrepancies
Recurring revenue was impacted by mismatches between treatment utilization and ordering patterns from large acute care customers, expected to normalize in 2026.
Company Guidance
During the Outset Medical Q3 2025 earnings call, the company revised its revenue guidance for 2025 to a range of $115 million to $120 million, down from the previous range of $122 million to $126 million. The company reported Q3 revenue of $29.4 million, a 3% increase from the same quarter in the previous year, with Tablo console sales increasing by 8%, and non-GAAP gross margin reaching nearly 40%. The guidance revision was attributed to the timing shift of several large sales opportunities that are now expected to close in Q4 2025 and into 2026, impacted by changes in sales leadership and internal disruptions. The company remains optimistic about future growth due to increasing demand for its Tablo systems, with an average sales opportunity size increase of over 20% and continued high utilization rates of its installed units.Outset Medical Financial Statement Overview
Summary
Outset Medical shows strong revenue growth but struggles with profitability and cash flow management. The company has reduced debt, which is positive, but achieving profitability remains critical.Income Statement
Outset Medical's income statement shows a mixed performance. The company has experienced significant revenue growth in the TTM (Trailing-Twelve-Months) with a 64.1% increase, which is a positive indicator. However, profitability remains a challenge with negative net profit margins and EBIT margins, indicating ongoing operational losses. The gross profit margin has improved over time, but the company still struggles to achieve positive net income.Balance Sheet
The balance sheet reflects a significant reduction in debt levels, improving the debt-to-equity ratio to 0.02 in the TTM from a high of 7.53 in the previous year. However, the return on equity remains negative, indicating that the company is not generating sufficient returns on shareholder investments. The equity ratio is relatively stable, suggesting a balanced asset structure.Cash Flow
Cash flow analysis reveals some improvements, with a slight decrease in negative free cash flow growth. The operating cash flow to net income ratio indicates that cash outflows are still significant compared to net losses. The free cash flow to net income ratio is slightly above 1, suggesting that the company is managing its cash flow relative to its net income effectively, despite ongoing losses.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 120.07M | 113.69M | 130.38M | 115.38M | 102.60M | 49.94M |
| Gross Profit | 45.27M | 38.56M | 29.00M | 17.83M | 7.61M | -13.04M |
| EBITDA | -69.73M | -97.89M | -153.79M | -152.81M | -124.86M | -114.85M |
| Net Income | -87.80M | -127.98M | -172.80M | -162.96M | -131.94M | -120.70M |
Balance Sheet | ||||||
| Total Assets | 277.25M | 275.80M | 313.80M | 400.12M | 463.46M | 403.83M |
| Cash, Cash Equivalents and Short-Term Investments | 178.64M | 158.69M | 203.32M | 287.50M | 339.49M | 314.87M |
| Total Debt | 3.16M | 201.86M | 136.19M | 103.23M | 37.81M | 38.60M |
| Total Liabilities | 134.89M | 248.98M | 190.91M | 154.13M | 89.38M | 75.22M |
| Stockholders Equity | 142.37M | 26.82M | 122.89M | 245.99M | 374.08M | 328.61M |
Cash Flow | ||||||
| Free Cash Flow | -53.91M | -117.22M | -134.81M | -154.05M | -133.37M | -108.12M |
| Operating Cash Flow | -53.29M | -116.30M | -131.37M | -145.73M | -130.26M | -99.02M |
| Investing Cash Flow | 1.88M | 103.94M | 83.03M | -66.30M | -142.51M | 3.95M |
| Financing Cash Flow | 54.56M | 67.87M | 43.65M | 72.90M | 160.15M | 385.68M |
Outset Medical Technical Analysis
Negative
4.67
Price Trends
5.95
Negative
10.05
Negative
12.97
Negative
Market Momentum
-0.42
Negative
53.45
Neutral
96.12
Negative
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 4.67 is above the 20-day moving average (MA) of 3.86, below the 50-day MA of 5.95, and below the 200-day MA of 12.97, indicating a neutral trend. The MACD of -0.42 indicates Negative momentum. The RSI at 53.45 is Neutral, neither overbought nor oversold. The STOCH value of 96.12 is Negative, 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 83 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $245.21M | 31.22 | 19.02% | ― | 16.05% | 29.48% | |
54 Neutral | $193.20M | -3.41 | -34.75% | ― | 15.19% | -3.32% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $215.45M | -4.18 | -91.88% | ― | 18.44% | 25.42% | |
44 Neutral | $99.03M | -5.56 | -36.07% | ― | 1.51% | 5.07% | |
43 Neutral | $78.69M | -0.36 | -92.33% | ― | 4.65% | 68.71% | |
43 Neutral | $198.73M | -7.19 | -13.27% | ― | 4.68% | 55.37% |
* 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.