tiprankstipranks
Trending News
More News >
Owens & Minor (OMI)
NYSE:OMI
Advertisement

Owens & Minor (OMI) AI Stock Analysis

Compare
520 Followers

Top Page

OMI

Owens & Minor

(NYSE:OMI)

Rating:52Neutral
Price Target:
$8.00
▼(-2.91%Downside)
Owens & Minor's overall stock score reflects significant financial and valuation challenges, tempered by some positive technical signals and strategic growth areas. The termination of the merger adds uncertainty, but the reaffirmed guidance and growth in the Patient Direct segment offer some optimism.
Positive Factors
Growth Prospects
Patient Direct had another strong quarter, with sleep and diabetes once again leading the way.
Long-Term Outlook
The announcement of divesting the P&HS segment is viewed as ultimately favorable to the long-term outlook.
Strategic Focus
The decision not to move forward with the Rotech deal allows the company to focus on its core operations.
Negative Factors
Financial Impact
The termination of the Rotech deal has costs that will slow near-term debt paydown by approximately $100MM.
Macro Environment
Uncertainty around tariffs and an unstable macro environment are main dislikes at this point.
Tariff Uncertainty
Uncertainty on the evolving tariff situation is likely going to be the primary concern coming out of earnings.

Owens & Minor (OMI) vs. SPDR S&P 500 ETF (SPY)

Owens & Minor Business Overview & Revenue Model

Company DescriptionOwens & Minor, Inc. (OMI) is a global healthcare solutions company headquartered in the United States. The company operates in the healthcare products and services sectors, offering comprehensive supply chain management solutions, including distribution of medical and surgical supplies, logistics, and inventory management services. Owens & Minor serves an array of healthcare providers, such as hospitals, integrated health networks, and group purchasing organizations, as well as manufacturers in the medical sector.
How the Company Makes MoneyOwens & Minor generates revenue primarily through the distribution of medical and surgical supplies and related services. The company earns money by purchasing products from manufacturers and distributing them to healthcare providers, charging a markup on these products to cover costs and generate profit. Key revenue streams include the sale of medical and surgical supplies, logistics and inventory management services, and healthcare management solutions. Significant partnerships with manufacturers and healthcare providers enhance its distribution network and client base, contributing to its earnings. The company's ability to efficiently manage the supply chain and provide value-added services is crucial to maintaining its competitive edge and profitability.

Owens & Minor Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 6.19%|
Next Earnings Date:Aug 01, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative aspects. On the positive side, there was significant growth in the Patient Direct segment and successful investments in commercial resources and distribution centers. On the negative side, the company faces substantial tariff impacts, foreign currency headwinds, and a decline in the P&HS segment revenue. Despite these challenges, the reaffirmation of guidance and strategic initiatives indicate a cautiously optimistic outlook.
Q1-2025 Updates
Positive Updates
Patient Direct Segment Growth
The Patient Direct segment saw a top-line growth in the mid-single digits, with operating income growing by 31%, translating to a $14 million increase and a 173 basis point expansion.
Successful Sleep Journey Investment
Investments in the sleep journey led to a meaningful increase in sleep starts and high single-digit revenue growth in sleep supplies for the first quarter.
Expansion in Commercial Resources
Expansion in commercial resources resulted in double-digit growth in categories like wound supplies, ostomy, and urology.
New Distribution Centers
Opened new state-of-the-art distribution centers in Morgantown, West Virginia, and Sioux Falls, South Dakota.
Record Collection Rates
Record collection rates were achieved in the Byram division, with plans to replicate this in the Apria division by year-end.
Revenue Growth
Overall revenue for the quarter was $2.6 billion, up 2.3% on a same-day basis compared to the prior year.
Adjusted Operating Income Increase
Adjusted operating income increased by about 7% versus Q1 2024.
Negative Updates
Tariff Impact on Profit Margin
Tariffs on Chinese facial protection and gloves, ranging from 25% to 50%, have been significant, with new tariffs ranging from 145% for imports from China, leading to potential annual exposure of $100 million to $150 million.
Foreign Currency Headwinds
Adverse changes in foreign currency rates in the P&HS segment drove consolidated gross margin rate down by about 50 basis points, impacting consolidated adjusted operating income by $3 million.
Decline in P&HS Segment Revenue
Reported revenue for the Products and Healthcare Services segment declined by 0.8%, influenced by lower year-over-year glove prices and lower international sales.
Higher Costs and Expenses
Cash flow impacted by increased working capital due to new distribution centers and anticipation of tariffs, along with $23 million in cash expenses related to strategic initiatives.
Company Guidance
During the Owens & Minor First Quarter 2025 Earnings Conference Call, the company provided guidance on various financial metrics and strategic initiatives. The Patient Direct segment reported a mid-single-digit growth in top-line revenue and a remarkable 31% increase in operating income, amounting to a $14 million gain with a 173 basis point expansion. The company's overall revenue for the quarter was $2.6 billion, reflecting a 2.3% growth compared to the prior year on a same-day basis. The Products and Healthcare Services segment experienced a slight decline in reported revenue by 0.8%, though it grew by 0.7% on a same-sales day basis. Adjusted operating income improved by approximately 7%, reaching $61 million, with Patient Direct's segment operating income growing by 31%. Adjusted net income increased by 20%, translating to $18 million or $0.23 per share. The company reaffirmed its guidance for 2025, anticipating that at least 70% of earnings and cash flow will be generated in the second half of the year. Additionally, Owens & Minor is implementing price increases in response to tariffs, primarily affecting the Products and Healthcare Services segment, with an estimated annual exposure of $100 million to $150 million.

Owens & Minor Financial Statement Overview

Summary
Owens & Minor faces significant profitability challenges despite revenue growth, with negative net income impacting overall financial health. The high leverage and fluctuating cash flow pose risks, necessitating focused management strategies to enhance profitability and stabilize cash flows.
Income Statement
45
Neutral
Owens & Minor's revenue has shown a steady growth trajectory, with a notable increase over the past years. However, profitability metrics reveal challenges, with negative EBIT and net income in the most recent TTM period. The gross profit margin remains stable, but the negative net profit margin highlights ongoing operational struggles.
Balance Sheet
50
Neutral
The balance sheet reflects a high debt-to-equity ratio, suggesting significant leverage. Although the equity ratio indicates a solid proportion of assets financed by equity, the return on equity is negative, driven by consistent net losses, indicating financial stress.
Cash Flow
40
Negative
Cash flow analysis shows fluctuating free cash flow, with a negative trend in the most recent TTM. The operating cash flow to net income ratio indicates that cash from operations is relatively unaffected by net losses, providing some liquidity cushion. The negative free cash flow to net income ratio suggests cash flow generation challenges.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue10.70B10.33B9.96B9.79B8.48B
Gross Profit2.22B2.13B1.83B1.51B1.28B
EBITDA51.22M400.29M367.80M415.46M277.41M
Net Income-362.69M-41.30M22.39M221.59M88.07M
Balance Sheet
Total Assets4.66B5.09B5.39B3.54B3.34B
Cash, Cash Equivalents and Short-Term Investments49.38M243.04M69.47M55.71M83.06M
Total Debt2.14B2.32B2.70B1.11B1.11B
Total Liabilities4.09B4.17B4.44B2.60B2.62B
Stockholders Equity565.23M924.17M945.60M938.50M712.05M
Cash Flow
Free Cash Flow-66.67M532.82M158.42M74.49M280.03M
Operating Cash Flow161.50M740.71M325.01M124.18M339.22M
Investing Cash Flow-116.53M-137.25M-1.80B-53.63M80.07M
Financing Cash Flow-267.60M-417.33M1.50B-129.48M-379.39M

Owens & Minor Technical Analysis

Technical Analysis Sentiment
Positive
Last Price8.24
Price Trends
50DMA
7.70
Positive
100DMA
7.98
Positive
200DMA
10.24
Negative
Market Momentum
MACD
0.03
Positive
RSI
52.87
Neutral
STOCH
43.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OMI, the sentiment is Positive. The current price of 8.24 is below the 20-day moving average (MA) of 8.41, above the 50-day MA of 7.70, and below the 200-day MA of 10.24, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 52.87 is Neutral, neither overbought nor oversold. The STOCH value of 43.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OMI.

Owens & Minor Risk Analysis

Owens & Minor disclosed 44 risk factors in its most recent earnings report. Owens & Minor 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

Owens & Minor Peers Comparison

Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$56.78B34.00161.58%0.74%12.18%-5.92%
74
Outperform
$8.79B22.4411.78%1.75%8.76%
71
Outperform
$88.62B27.5851.23%0.48%16.22%15.29%
70
Outperform
$37.50B24.53-43.80%1.61%0.78%183.45%
52
Neutral
$7.61B0.04-62.94%2.44%16.14%0.33%
52
Neutral
$620.57M-49.91%2.84%-828.91%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OMI
Owens & Minor
8.24
-7.43
-47.42%
COR
Cencora
293.44
68.27
30.32%
CAH
Cardinal Health
157.76
62.35
65.35%
HSIC
Henry Schein
74.19
3.15
4.43%
MCK
McKesson
714.00
120.95
20.39%

Owens & Minor Corporate Events

M&A TransactionsBusiness Operations and StrategyRegulatory Filings and Compliance
Owens & Minor Ends Merger with Rotech Healthcare
Negative
Jun 5, 2025

On June 3, 2025, Owens & Minor, Inc. and Rotech Healthcare Holdings Inc. mutually agreed to terminate their merger agreement, with Owens & Minor paying an $80 million termination fee to Rotech. The decision was influenced by regulatory challenges and the company will now focus on growing its Patient Direct business and deleveraging, while exploring potential sales of its Products and Healthcare Services business.

The most recent analyst rating on (OMI) stock is a Sell with a $7.00 price target. To see the full list of analyst forecasts on Owens & Minor stock, see the OMI Stock Forecast page.

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Owens & Minor Shareholders Approve Key Governance Decisions
Neutral
May 16, 2025

On May 15, 2025, Owens & Minor, Inc. held its Annual Meeting of Shareholders where key decisions were made. The shareholders elected nine directors for a one-year term and ratified KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. Additionally, an advisory vote approved the compensation of the company’s named executive officers. These decisions reflect the company’s ongoing governance and operational strategies, potentially impacting its market positioning and stakeholder relations.

The most recent analyst rating on (OMI) stock is a Sell with a $18.00 price target. To see the full list of analyst forecasts on Owens & Minor stock, see the OMI Stock Forecast page.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Owens & Minor Reports Q1 2025 Financial Results
Neutral
May 8, 2025

On May 8, 2025, Owens & Minor reported its first-quarter financial results, highlighting a mid-single-digit top-line growth in its Patient Direct segment, driven by strong performance in therapy categories like Diabetes and Sleep Supplies. The company also noted a 173 basis point expansion in the operating margin for this segment. Despite a net loss, the company reaffirmed its 2025 financial guidance, projecting revenue between $10.85 billion and $11.15 billion, and adjusted EBITDA between $560 million and $590 million. Owens & Minor remains engaged in the potential sale of its Products & Healthcare Services segment and is focused on disciplined capital deployment and integrating its planned acquisition of Rotech.

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.Date of analysis: Jul 23, 2025