OSI Systems (OSIS) AI Stock Analysis

• Market Cap: $4.40B
• Dividend Yield: N/A
• Average Volume (3M): 286.99K
• Price to Earnings (P/E): 29.4
• Beta (1Y): 1.47
• Revenue Growth: 9.37%
• EPS Growth: 15.70%
• Country: US
• Employees: 6,681
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 1.42
• Shares Outstanding: 16,977,873
• 10 Day Avg. Volume: 204,286
• 30 Day Avg. Volume: 286,994
• PEG Ratio: 1.43
• Price to Book (P/B): 4.06
• Price to Sales (P/S): 2.25
• P/FCF Ratio: 68.86
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 2.83
• Enterprise Value/Gross Profit: 8.42
• Enterprise Value/Ebitda: 18.87
• 1Y Price Target: $285.50
• Price Target Upside: 10.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 10.38
• Revenue Forecast (FY): $1.84B

• Rating: 76 Outperform
• Price Target: $297.00 ▲(14.48% Upside)

OSI Systems demonstrates strong financial performance and positive earnings call sentiment, which are the most significant factors driving the score. Technical analysis suggests a generally positive trend, though valuation concerns due to a high P/E ratio and no dividend yield slightly offset the positives. The recent corporate event further supports a stable outlook.

Positive Factors

Revenue Growth

The consistent revenue growth, particularly in the Security division, indicates strong market demand and effective sales strategies, supporting long-term business expansion.

Financial Flexibility

The strategic financial move to upsize the convertible notes offering enhances OSI Systems' financial flexibility, allowing for debt repayment and strategic investments, which can strengthen its market position.

Cash Flow Improvement

Significant improvement in free cash flow indicates efficient cash generation, providing OSI Systems with the ability to reinvest in growth opportunities and maintain financial stability.

Negative Factors

Margin Pressure

The decline in gross margin suggests potential challenges in cost management and pricing power, which could impact profitability if not addressed.

Revenue Decline from Key Contracts

The significant drop in revenue from Mexico security contracts highlights dependency on certain contracts, posing a risk to revenue stability if not compensated by other growth areas.

Operating Margin Pressure

The decrease in operating margin within the Security division suggests challenges in maintaining cost efficiency, which could affect overall profitability if persistent.

OSI Systems Business Overview & Revenue Model

Company Description

OSI Systems, Inc. designs and manufactures electronic systems and components worldwide. It operates in three segments: Security, Healthcare, and Optoelectronics and Manufacturing. The Security segment offers baggage and parcel inspection, cargo and vehicle inspection, hold baggage and people screening, radiation detection, and explosive and narcotics trace detection systems under the Rapiscan Systems, AS&E, and Gatekeeper names. It also provides site design, installation, training, and technical support services; and security screening solutions under the S2 name. The Healthcare segment offers patient monitoring and diagnostic cardiology systems, and related supplies and accessories under the Spacelabs name for use in critical care, emergency, and perioperative areas within hospitals, physicians' offices, medical clinics, and ambulatory surgery centers. The Optoelectronics and Manufacturing segment provides optoelectronic devices under the OSI Optoelectronics, OSI LaserDiode, OSI Laserscan, Semicoa, and Advanced Photonix names for the aerospace and defense, avionics, medical imaging and diagnostics, biochemistry analysis, pharmaceutical, nanotechnology, telecommunications, construction, and homeland security markets. It also offers electronics manufacturing services to original equipment manufacturers and end users for medical, automotive, defense, aerospace, industrial, and consumer applications under the OSI Electronics, APlus Products, Altaflex, and PFC names; and LCD displays for medical, industrial, and consumer electronics applications, as well as flex circuits for OEM customers. This segment offers laser-based remote sensing devices to detect and classify vehicles in toll and traffic management systems under the OSI Laserscan and Autosense names; and solid-state laser products for aerospace, defense, telecommunication, and medical applications under the OSI LaserDiode name. The company was incorporated in 1987 and is headquartered in Hawthorne, California.

How the Company Makes Money

OSI Systems generates revenue through multiple streams, primarily from the sale of security and healthcare products and systems. The Security segment, which includes X-ray imaging systems and cargo and vehicle inspection systems, represents a significant portion of their income, driven by contracts with government agencies, airports, and other security-focused organizations. The Healthcare segment contributes revenue through the sale of medical devices and diagnostic equipment, often through long-term contracts with hospitals and healthcare providers. Additionally, the Optoelectronics and Manufacturing segment provides custom manufacturing services, which also adds to their earnings. The company benefits from strategic partnerships and collaborations with government entities and private organizations that enhance its market reach and technological capabilities.

OSI Systems Financial Statement Overview

Summary

OSI Systems demonstrates strong financial health with consistent revenue growth, solid profitability, and a stable balance sheet. The company effectively manages its leverage, resulting in low financial risk. Cash flow generation has improved significantly, although past volatility should be monitored.

Income Statement

OSI Systems has demonstrated consistent revenue growth, with a TTM revenue growth rate of 2.37%. The gross profit margin remains strong at 33.58%, indicating efficient cost management. The net profit margin is healthy at 8.68%, reflecting solid profitability. However, the EBIT margin has decreased slightly in the TTM period, suggesting potential pressure on operating efficiency.

Balance Sheet

The company's balance sheet is robust, with a very low debt-to-equity ratio of 0.0057 in the TTM period, indicating minimal leverage and financial risk. The return on equity is strong at 16.91%, showcasing effective use of shareholder funds. The equity ratio is solid, reflecting a stable financial structure. However, the decrease in total debt compared to previous periods suggests a strategic shift in capital structure.

Cash Flow

OSI Systems has shown significant improvement in free cash flow growth, with a remarkable 76% increase in the TTM period. The operating cash flow to net income ratio is 0.19, indicating a strong conversion of earnings into cash. The free cash flow to net income ratio is slightly above 1, suggesting efficient cash generation relative to profits. However, previous periods showed volatility in cash flow metrics, which could pose risks.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.75B	1.71B	1.54B	1.28B	1.18B	1.15B
Gross Profit	588.87M	587.18M	530.46M	430.51M	424.43M	419.92M
EBITDA	262.66M	261.10M	230.72M	173.79M	167.97M	159.23M
Net Income	152.26M	149.64M	128.15M	91.78M	115.35M	74.05M
Balance Sheet
Total Assets	2.30B	2.24B	1.94B	1.56B	1.44B	1.38B
Cash, Cash Equivalents and Short-Term Investments	124.42M	106.41M	95.35M	76.75M	64.20M	80.61M
Total Debt	5.38M	682.32M	552.38M	393.09M	393.31M	301.08M
Total Liabilities	1.35B	1.29B	1.07B	829.52M	804.73M	744.55M
Stockholders Equity	945.96M	951.08M	863.48M	726.16M	638.42M	639.82M
Cash Flow
Free Cash Flow	133.31M	56.09M	-126.93M	62.56M	33.32M	109.56M
Operating Cash Flow	151.89M	97.59M	-87.50M	94.81M	63.81M	139.07M
Investing Cash Flow	-41.30M	-117.85M	-37.64M	-40.46M	-12.67M	-34.69M
Financing Cash Flow	-70.75M	30.82M	144.25M	-37.17M	-64.01M	-103.92M

OSI Systems Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 259.44
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OSIS, the sentiment is Neutral. The current price of 259.44 is below the 20-day moving average (MA) of 261.81, below the 50-day MA of 260.67, and above the 200-day MA of 227.94, indicating a neutral trend. The MACD of 0.49 indicates Positive momentum. The RSI at 46.99 is Neutral, neither overbought nor oversold. The STOCH value of 28.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for OSIS.

OSI Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TTMI	77 Outperform	$7.59B	58.52	8.12%	―	17.88%	91.41%
OSIS	76 Outperform	$4.40B	29.41	17.58%	―	9.37%	15.70%
PLXS	75 Outperform	$4.28B	25.51	12.44%	―	1.82%	56.52%
VICR	73 Outperform	$4.37B	53.57	13.89%	―	11.55%	1745.46%
NOVT	70 Neutral	$4.26B	81.32	6.84%	―	4.07%	-12.34%
ST	63 Neutral	$5.07B	-181.81	-0.92%	1.38%	-8.07%	63.50%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

OSI Systems Corporate Events

OSI Systems Holds Annual Stockholders Meeting

OSI Systems held its Annual Meeting of Stockholders on December 11, 2025, where key decisions were made regarding the company’s governance and financial oversight. The meeting resulted in the election of six directors to the Board, the ratification of Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending June 30, 2026, and an advisory vote on executive compensation for the fiscal year ended June 30, 2025.

OSI Systems Issues Notes to Institutional Buyers

OSI Systems has issued Notes to initial purchasers under Section 4(a)(2) of the Securities Act of 1933, targeting qualified institutional buyers. A maximum of 2,153,260 shares of common stock may be issued upon conversion of these Notes, with anti-dilution adjustments applicable.

OSI Systems Upsizes Convertible Notes Offering to $500M

On November 17, 2025, OSI Systems announced the pricing of its upsized $500 million convertible senior notes offering, increased from the initially planned $400 million. The notes, due in 2031, carry a 0.50% interest rate and are aimed at qualified institutional buyers. The proceeds, estimated at $489.4 million, will be used for share repurchases, debt repayment, and general corporate purposes. This strategic financial move is expected to influence the trading price of OSI’s common stock and impact the company’s financial structure, potentially enhancing its market positioning.

OSI Systems Announces $400M Convertible Notes Offering

On November 17, 2025, OSI Systems announced a proposed private offering of $400 million in convertible senior notes due 2031 to qualified institutional buyers. The notes, which are senior unsecured obligations, will accrue interest semi-annually and may be converted under certain conditions. OSI plans to use $175 million of the proceeds to repurchase its common stock, potentially impacting stock prices, and the remainder for repaying credit facilities and general corporate purposes.