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OSI Systems
(NASDAQ:OSIS)
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Rating:62Neutral
Price Target:
$210.00
▼(-32.19% Downside)
Action:Reiterated
Date:05/09/26
OSIS scores solidly on fundamentals—strong growth, healthy margins, and a strong balance sheet—supported by a constructive earnings call with record backlog/bookings and maintained guidance. The overall score is pulled down by weak technicals (price below key moving averages with negative MACD) and only middling valuation support given the ~28.7 P/E and no dividend yield provided.
Positive Factors
Consistent revenue growth and healthy margins
Sustained top-line momentum with mid‑30s gross margins and double‑digit EBIT shows durable demand and pricing power across core segments. These margins support reinvestment and resiliency to cost swings, underpinning long‑term profit generation even if sales mix shifts.
Negative Factors
Volatile cash generation and declining FCF
Material volatility in cash conversion undermines the reliability of earnings as a funding source for investments and debt reduction. A sharp FCF decline raises questions about collection cycles, capex timing and the ability to sustain shareholder returns or fund growth without external financing.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent revenue growth and healthy margins
Sustained top-line momentum with mid‑30s gross margins and double‑digit EBIT shows durable demand and pricing power across core segments. These margins support reinvestment and resiliency to cost swings, underpinning long‑term profit generation even if sales mix shifts.
Read all positive factors
OSI Systems Key Performance Indicators (KPIs)
Any
Operating Income by Segment
Tracks profit generated by each business unit before financing and taxes, exposing which segments drive profits and which drag on margins. Useful for spotting sustainable cash generators, evaluating management focus, and understanding how cost structure or one-off items affect overall company profitability.
Tracks profit generated by each business unit before financing and taxes, exposing which segments drive profits and which drag on margins. Useful for spotting sustainable cash generators, evaluating management focus, and understanding how cost structure or one-off items affect overall company profitability.
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The Fly
The FlyOSI Systems (OSIS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.58B
Dividend YieldN/A
Average Volume (3M)286.53K
Price to Earnings (P/E)24.1
Beta (1Y)1.46
Revenue Growth6.98%
EPS Growth8.41%
CountryUS
Employees6,681
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)9.00
Shares Outstanding16,482,890
10 Day Avg. Volume237,236
30 Day Avg. Volume286,529
Financial Highlights & Ratios
PEG Ratio1.40
Price to Book (P/B)4.06
Price to Sales (P/S)2.25
P/FCF Ratio68.86
Enterprise Value/Market Cap1.18
Enterprise Value/Revenue2.35
Enterprise Value/Gross Profit7.27
Enterprise Value/Ebitda16.39
Forecast
1Y Price Target
$294.75Price Target Upside-4.82% Downside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)11.4
Revenue Forecast (FY)$1.94B
OSI Systems Business Overview & Revenue Model
Company Description
OSI Systems, Inc. (OSIS) is a global company specializing in the design and production of advanced electronic systems and components. Its operations are structured across three distinct business segments: Security, Healthcare, and Optoelectronics ...
How the Company Makes Money
OSI Systems generates revenue primarily through product and system sales, long-term program contracts, and ongoing service and support across its three operating segments. In its Security segment, the company sells security inspection and screenin...
OSI Systems Earnings Call Summary
Earnings Call Date:May 04, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 20, 2026
Earnings Call Sentiment Positive
The call presented multiple strong operational and financial achievements — record revenue and non-GAAP EPS, a record backlog (~$1.9B), robust bookings (1.3 book-to-bill), pronounced growth in Security excluding Mexico (+25%) and Opto (+10%), RF business momentum, and a meaningful post-quarter Mexico receivable collection (~$74M). Challenges were primarily timing-related and regional: a sharp decline in Mexico product revenue (shift to service), Healthcare softness and negligible margins, temporary disruptions from the Middle East conflict and the DHS shutdown, modest margin and mix pressure, and elevated DSO. Because the positive developments are material (records across revenue, EPS, backlog, bookings, and strategic awards) and management expects many headwinds to be timing-related and to abate, the overall tone is constructive.Positive Updates
Record Quarterly Revenue and EPS
Total revenues reached a fiscal Q3 record of $453 million and non-GAAP diluted EPS set a fiscal Q3 record of $2.60.
Negative Updates
Significant Mexico Revenue Decline
Revenues from large Mexico Security contracts dropped to $11 million in Q3 from $69 million in the prior-year quarter (a decrease of ~84%), driven by a shift from product sales to long-term service and support.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Quarterly Revenue and EPS
Total revenues reached a fiscal Q3 record of $453 million and non-GAAP diluted EPS set a fiscal Q3 record of $2.60.
Read all positive updates
Company Guidance
OSI maintained its fiscal 2026 guidance for revenues and non‑GAAP diluted EPS (excluding potential impairment, restructuring, acquired‑intangible amortization and discrete/non‑recurring tax items), while warning Q4 bookings and revenue timing could be impacted by the recent DHS shutdown and Middle East conflicts; management pointed to a record backlog of ~$1.9 billion and a 1.3 book‑to‑bill, highlighted Q3 results of $453 million revenue and $2.60 non‑GAAP EPS, Q3 operating cash flow of $14 million plus a post‑quarter $74 million Mexico collection, cash of $345 million and net leverage of ~2.2, and said Q3 Security revenue was $319 million (Mexico $11M vs. $69M LY; Security ex‑Mexico +25% Y/Y), Opto was $111 million (+10% Y/Y), gross margin was 33%, adjusted operating margin about 14% (Security 18.3%, Opto 13.5%), SG&A $71.5M (15.8% of sales), R&D $19.5M (4.3% of sales), DSO up 7% from Q2 but expected to decline by year‑end, and management expects the Mexico headwind to largely roll off into FY2027 with substantial Q4/fiscal‑2027 cash inflows and strong free‑cash‑flow conversion possible.OSI Systems Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
82
Very Positive
Cash Flow
56
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.81B | 1.71B | 1.54B | 1.28B | 1.18B | 1.15B |
| Gross Profit | 583.85M | 587.18M | 530.46M | 430.51M | 424.43M | 419.92M |
| EBITDA | 258.87M | 261.10M | 231.27M | 173.79M | 167.97M | 159.23M |
| Net Income | 152.22M | 149.64M | 128.15M | 91.78M | 115.35M | 74.05M |
Balance Sheet | ||||||
| Total Assets | 2.55B | 2.24B | 1.94B | 1.56B | 1.44B | 1.38B |
| Cash, Cash Equivalents and Short-Term Investments | 345.24M | 106.41M | 95.35M | 76.75M | 64.20M | 80.61M |
| Total Debt | 1.00B | 682.32M | 552.38M | 393.09M | 393.31M | 301.08M |
| Total Liabilities | 1.66B | 1.29B | 1.07B | 829.52M | 804.73M | 744.55M |
| Stockholders Equity | 894.32M | 951.08M | 863.48M | 726.16M | 638.42M | 639.82M |
Cash Flow | ||||||
| Free Cash Flow | 62.82M | 56.09M | -126.93M | 62.56M | 33.32M | 109.56M |
| Operating Cash Flow | 94.36M | 97.59M | -87.50M | 94.81M | 63.81M | 139.07M |
| Investing Cash Flow | -39.87M | -117.85M | -37.64M | -40.46M | -12.67M | -34.69M |
| Financing Cash Flow | 194.60M | 30.82M | 144.25M | -37.17M | -64.01M | -103.92M |
OSI Systems Technical Analysis
Negative
309.68
Price Trends
225.25
Negative
254.51
Negative
258.69
Negative
Market Momentum
-2.05
Negative
46.33
Neutral
48.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OSIS, the sentiment is Negative. The current price of 309.68 is above the 20-day moving average (MA) of 219.26, above the 50-day MA of 225.25, and above the 200-day MA of 258.69, indicating a bearish trend. The MACD of -2.05 indicates Negative momentum. The RSI at 46.33 is Neutral, neither overbought nor oversold. The STOCH value of 48.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OSIS.
OSI Systems Risk Analysis
OSI Systems disclosed 49 risk factors in its most recent earnings report. OSI Systems reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
OSI Systems Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $12.00B | 91.56 | 20.22% | ― | 15.59% | 491.65% | |
71 Outperform | $7.11B | 38.76 | 12.83% | ― | 8.64% | 32.91% | |
70 Outperform | $5.29B | 108.33 | 5.08% | ― | 5.59% | -28.67% | |
62 Neutral | $3.58B | 24.07 | 16.74% | ― | 6.98% | 8.41% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $15.09B | 79.35 | 11.26% | ― | 23.10% | 146.72% | |
59 Neutral | $6.39B | 131.65 | 1.72% | 1.43% | -3.37% | -59.55% |
* Technology Sector Average
OSIS
OSI Systems
216.65
-13.33
-5.80%
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TTMI
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149.97
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VICR
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277.43
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489.52%
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.