OSI Systems (OSIS)
NASDAQ:OSIS
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OSI Systems
(NASDAQ:OSIS)
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Rating:68Neutral
Price Target:
$310.00
▲(12.85% Upside)
Action:ReiteratedDate:01/31/26
The score is driven primarily by solid underlying financial performance (growth and improving profitability) and a constructive earnings update (raised EPS guidance and stable backlog). These positives are offset by weak near-term technical momentum and some fundamental risk factors—meaningful leverage, historically uneven cash flow, and a notable Q3 revenue headwind tied to Mexico and timing-related bookings softness.
Positive Factors
Sustained revenue growth and improving margins
OSI has delivered multi-year top-line expansion with record quarterly revenue and improving net/operating margins (net margin up from ~6.5% in 2021 to ~8.7% in FY2025/TTM). Such revenue scale and margin expansion support durable profitability and reinvestment capacity.
Negative Factors
Elevated leverage and rising debt
Meaningful increases in leverage reduce financial flexibility and heighten refinancing and interest-rate risks. In stressed operating conditions, higher debt levels constrain capital allocation, limit strategic optionality, and can amplify earnings volatility from cyclical end markets.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained revenue growth and improving margins
OSI has delivered multi-year top-line expansion with record quarterly revenue and improving net/operating margins (net margin up from ~6.5% in 2021 to ~8.7% in FY2025/TTM). Such revenue scale and margin expansion support durable profitability and reinvestment capacity.
Read all positive factors
OSI Systems (OSIS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.53B
Dividend YieldN/A
Average Volume (3M)276.70K
Price to Earnings (P/E)27.6
Beta (1Y)1.49
Revenue Growth9.37%
EPS Growth15.70%
CountryUS
Employees6,681
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)2.58
Shares Outstanding16,472,550
10 Day Avg. Volume353,546
30 Day Avg. Volume276,705
Financial Highlights & Ratios
PEG Ratio1.43
Price to Book (P/B)4.06
Price to Sales (P/S)2.25
P/FCF Ratio68.86
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue2.89
Enterprise Value/Gross Profit8.75
Enterprise Value/Ebitda19.78
Forecast
1Y Price Target
$299.25Price Target Upside8.94% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)10.46
Revenue Forecast (FY)$1.84B
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 an...
How the Company Makes Money
OSI Systems makes money by selling products and services across three operating segments. (1) Security: Revenue is generated from the sale of security inspection and screening equipment (e.g., baggage, parcel, cargo/vehicle, and people-screening s...
OSI Systems Key Performance Indicators (KPIs)
OSI Systems Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call conveyed multiple strong operational and financial positives: record quarterly revenue and EPS, double-digit growth in the two largest divisions (Security and Optoelectronics), solid operating cash flow, improved liquidity from a low-cost convertible issuance, and a healthy backlog with large pipeline opportunities (including RF / Golden Dome participation). Offsetting these strengths are near-term headwinds driven by a 50% decline in Mexico-related revenues that creates a concentrated Q3 revenue drag (> $50M), softer-than-expected Security bookings (timing delays), mix-driven margin pressure and weakness in Healthcare. Management provided updated, upgraded non-GAAP EPS guidance while keeping revenue guidance steady and emphasized expected stronger results in Q4 as Mexico comps ease and backlog converts. Overall, the positive operating and cash-flow developments, strategic wins and improved guidance outweigh the near-term timing and mix challenges.Positive Updates
Record Q2 Revenue and Growth
Total revenues increased 11% year-over-year to a Q2 record of $464 million, driven by broad demand across divisions and a healthy backlog of $1.8 billion.
Negative Updates
Mexico Contract Revenue Decline
Revenues related to large Mexico security contracts decreased 50% year-over-year to $27 million in Q2 (from $54 million), creating a significant near-term revenue headwind—management expects a Q3 revenue headwind of over $50 million year-over-year and pronounced pressure in Q3 before improvement in Q4.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Q2 Revenue and Growth
Total revenues increased 11% year-over-year to a Q2 record of $464 million, driven by broad demand across divisions and a healthy backlog of $1.8 billion.
Read all positive updates
Company Guidance
OSI raised its fiscal non‑GAAP EPS guidance to $10.30–$10.55 (implying ~10%–13% YoY growth) while maintaining revenue guidance, noting the outlook excludes impairments, restructuring, amortization and discrete tax items; management expects a Q3 revenue headwind of over $50 million (driven largely by Mexico) with significantly stronger growth in Q4 and H2 and backlog roughly unchanged at $1.8 billion. The company pointed to a strong Q2 base — revenues $464 million (+11% YoY), record non‑GAAP adjusted EPS $2.58, Security revenues $335 million (+15%), Optoelectronics $113 million (+12%) — with Q2 gross margin 33% and company‑level adjusted operating margin 14% (Security 17.8%, Opto 12.9%). Cash generation and balance sheet metrics underpin the guidance: operating cash flow $62 million (Q2), free cash flow $7 million (Q2), D&A $9.6 million, R&D $19.8 million (4.3% of sales), net leverage ~2.2, convertible notes $575 million at 0.5% issued in November, and ~547,000 shares repurchased at an average $267 per share; normalized tax rate used for non‑GAAP EPS was ~23.3%.OSI Systems Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
72
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.80B | 1.71B | 1.54B | 1.28B | 1.18B | 1.15B |
| Gross Profit | 593.34M | 587.18M | 530.46M | 430.51M | 424.43M | 419.92M |
| EBITDA | 262.46M | 261.10M | 230.72M | 173.79M | 167.97M | 159.23M |
| Net Income | 153.14M | 149.64M | 128.15M | 91.78M | 115.35M | 74.05M |
Balance Sheet | ||||||
| Total Assets | 2.52B | 2.24B | 1.94B | 1.56B | 1.44B | 1.38B |
| Cash, Cash Equivalents and Short-Term Investments | 336.72M | 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 | 1.68B | 1.29B | 1.07B | 829.52M | 804.73M | 744.55M |
| Stockholders Equity | 845.49M | 951.08M | 863.48M | 726.16M | 638.42M | 639.82M |
Cash Flow | ||||||
| Free Cash Flow | 142.33M | 56.09M | -126.93M | 62.56M | 33.32M | 109.56M |
| Operating Cash Flow | 161.54M | 97.59M | -87.50M | 94.81M | 63.81M | 139.07M |
| Investing Cash Flow | -41.73M | -117.85M | -37.64M | -40.46M | -12.67M | -34.69M |
| Financing Cash Flow | 114.27M | 30.82M | 144.25M | -37.17M | -64.01M | -103.92M |
OSI Systems Technical Analysis
Positive
274.70
Price Trends
277.47
Positive
272.71
Positive
252.44
Positive
Market Momentum
1.29
Negative
53.38
Neutral
71.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OSIS, the sentiment is Positive. The current price of 274.7 is below the 20-day moving average (MA) of 280.05, below the 50-day MA of 277.47, and above the 200-day MA of 252.44, indicating a bullish trend. The MACD of 1.29 indicates Negative momentum. The RSI at 53.38 is Neutral, neither overbought nor oversold. The STOCH value of 71.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 | $7.17B | 41.35 | 18.74% | ― | 11.55% | 1745.46% | |
74 Outperform | $5.36B | 24.74 | 12.39% | ― | 1.82% | 56.52% | |
68 Neutral | $4.53B | 27.58 | 16.91% | ― | 9.37% | 15.70% | |
68 Neutral | $5.18B | 155.81 | 1.11% | 1.43% | -8.07% | 63.50% | |
68 Neutral | $9.92B | 41.17 | 10.61% | ― | 17.88% | 91.41% | |
62 Neutral | $4.23B | 80.88 | 5.84% | ― | 4.07% | -12.34% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
OSIS
OSI Systems
274.70
75.59
37.96%
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35.53
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38.12%
TTMI
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95.93
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345.36%
VICR
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157.96
107.33
211.99%
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.