OSI Systems (OSIS) AI Stock Analysis

• Market Cap: $4.72B
• Dividend Yield: N/A
• Average Volume (3M): 249.59K
• Price to Earnings (P/E): 32.5
• Beta (1Y): 1.51
• Revenue Growth: 9.37%
• EPS Growth: 15.70%
• Country: US
• Employees: 6,681
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 2.58
• Shares Outstanding: 16,472,550
• 10 Day Avg. Volume: 223,028
• 30 Day Avg. Volume: 249,595
• 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: 1.15
• Enterprise Value/Revenue: 3.02
• Enterprise Value/Gross Profit: 9.14
• Enterprise Value/Ebitda: 20.66
• 1Y Price Target: $302.40
• Price Target Upside: 5.49% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 10.46
• Revenue Forecast (FY): $1.84B

• Rating: 68 Neutral
• Price Target: $311.00 ▲(8.49% Upside)
• Action: Reiterated Date: 01/31/26
• Date: Action: Reiterated 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

Diversified, growing end-markets and backlog

Broad-based demand across Security and Optoelectronics produced record quarterly revenue and a $1.8B backlog, providing a durable multi-quarter revenue runway. Diversified segment exposure and recurring service/aftermarket streams reduce reliance on any single contract for medium-term growth.

Improving profitability and return metrics

Sustained revenue expansion coupled with rising operating and net margins indicates improving unit economics and operating leverage. Mid‑teens ROE historically shows capital efficiency, supporting reinvestment and shareholder returns while underpinning long‑term earnings resilience.

Solid cash generation and strategic liquidity actions

Recent positive operating and free cash flow run‑rate, plus a low‑cost convertible issuance that reduced revolver use, materially bolster liquidity and lower near‑term interest expense. Consistent cash generation allows funding backlog conversion, targeted capex, and selective buybacks over the medium term.

Negative Factors

Elevated leverage and rising debt ratios

Increased leverage and a higher debt/equity profile reduce financial flexibility and raise refinancing and covenant risk if end markets soften. While financing improved liquidity, meaningful leverage constrains capacity for opportunistic investment or sustained buybacks during downturns.

History of volatile operating cash flow

Material swings in operating cash flow — including a sharply negative FY2024 — point to working‑capital and timing variability tied to large contracts. This cash volatility complicates capital allocation planning and elevates execution risk for multi‑quarter projects and margin forecasting.

Customer concentration and bookings timing risk

Heavy reliance on a few large contracts and timing shifts (notably Mexico and delayed Security bookings) create meaningful quarter-to-quarter revenue swings and mix pressure. Such concentration increases execution risk, boosts margin volatility, and can delay cash conversion from backlog.

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

Solid and improving income statement trends (meaningful multi-year revenue growth and rising net/operating margins), but tempered by meaningful leverage increases on the balance sheet and historically volatile cash flow (notably a sharply negative FY2024 despite strong recent TTM cash generation).

Income Statement

Income statement performance is solid and improving. Revenue has grown meaningfully over the past several years (from ~$1.15B in 2021 to $1.71B in FY2025, and $1.80B in TTM (Trailing-Twelve-Months)), with strong recent TTM growth. Profitability is healthy and generally expanding, with net margin improving from ~6.5% (2021) to ~8.7% (FY2025/TTM) and operating profitability also trending higher. The main watch-out is that gross margin has drifted down versus earlier years (mid-30%s vs ~36% in 2021–2022), suggesting some mix/price-cost pressure even as operating execution remains good.

Balance Sheet

Balance sheet quality is good with solid shareholder returns, but leverage is meaningful. Returns on equity are strong (mid-teens in FY2023–FY2025 and ~17% in TTM (Trailing-Twelve-Months)), indicating effective profitability relative to the equity base. However, debt relative to equity is elevated and has generally increased versus earlier years (roughly ~0.43 in FY2021 to ~0.72 in FY2025), which adds financial risk and reduces flexibility if operating conditions soften. Overall asset base has expanded, supporting growth, but the higher leverage profile is the key constraint.

Cash Flow

Cash flow is positive recently but shows volatility. TTM (Trailing-Twelve-Months) operating cash flow (~$162M) and free cash flow (~$142M) are strong, and free cash flow covers most of net income (about ~88% in TTM (Trailing-Twelve-Months), improving from ~57% in FY2025). That said, cash generation has been inconsistent, including a sharp negative operating and free cash flow year in FY2024, which raises questions about working-capital swings or timing effects. Overall, the current run-rate is healthy, but the variability tempers the score.

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

• Technical Analysis Sentiment: Positive
• Last Price: 286.67
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 286.67 is above the 20-day moving average (MA) of 275.35, above the 50-day MA of 274.24, and above the 200-day MA of 247.86, indicating a bullish trend. The MACD of 5.41 indicates Negative momentum. The RSI at 56.15 is Neutral, neither overbought nor oversold. The STOCH value of 55.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OSIS.

OSI Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VICR	77 Outperform	$9.34B	80.17	18.50%	―	11.55%	1745.46%
PLXS	74 Outperform	$5.22B	30.33	12.63%	―	1.82%	56.52%
OSIS	68 Neutral	$4.72B	32.51	18.33%	―	9.37%	15.70%
ST	68 Neutral	$5.37B	174.81	1.10%	1.43%	-8.07%	63.50%
TTMI	68 Neutral	$11.68B	67.23	10.67%	―	17.88%	91.41%
NOVT	62 Neutral	$5.02B	96.46	5.23%	―	4.07%	-12.34%
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.

The most recent analyst rating on (OSIS) stock is a Buy with a $297.00 price target. To see the full list of analyst forecasts on OSI Systems stock, see the OSIS Stock Forecast page.