OSI Systems (OSIS) AI Stock Analysis

• Market Cap: $4.12B
• Dividend Yield: N/A
• Average Volume (3M): 223.25K
• Price to Earnings (P/E): 28.4
• Beta (1Y): 1.49
• 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: 16,977,873
• 10 Day Avg. Volume: 194,693
• 30 Day Avg. Volume: 223,247
• 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: 1.14
• Enterprise Value/Revenue: 2.61
• Enterprise Value/Gross Profit: 7.90
• Enterprise Value/Ebitda: 17.87
• 1Y Price Target: $301.00
• Price Target Upside: 20.33% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 10.42
• Revenue Forecast (FY): $1.84B

• Rating: 68 Neutral
• Price Target: $273.00 ▲(9.14% Upside)

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

Backlog and pipeline visibility

A $1.8B backlog provides durable multi-quarter revenue visibility and a runway to convert large project awards. Participation in major IDIQ programs and RF/naval wins supports sustained orderflow, reducing cyclicality risk and underpinning revenue stability over the next several quarters.

Multi-year revenue growth

Meaningful multi-year top-line expansion demonstrates successful market penetration across Security and Optoelectronics. Consistent revenue growth, coupled with rising operating and net margins, implies scalable operations and structural demand resilience across its end markets for the medium term.

Improving cash generation & liquidity actions

Recent strong operating cash flow and improved FCF coverage support internal funding for capex, R&D, and share repurchases. The company’s low-cost convertible issuance and reduced revolver use also strengthen liquidity, enhancing the firm’s ability to execute strategic investments and weather timing gaps.

Negative Factors

Elevated leverage

Higher leverage reduces financial flexibility and increases vulnerability to booking delays or revenue shocks. With net leverage near 2.2x, the firm faces greater fixed obligations and less maneuverability for opportunistic investments or adverse cycles, constraining capital allocation choices over the medium term.

Volatile cash flow history

Material swings in operating and free cash flow—including a deeply negative FY2024—signal working-capital sensitivity and timing risk in project execution. Such variability complicates forecasting, weakens predictability for debt paydown and buybacks, and raises execution risk for multi-quarter plans.

Healthcare weakness and mix-driven margin pressure

A structurally underperforming Healthcare segment and a drift in gross margins point to persistent mix and pricing pressures. Recovering margin contribution will require sustained investment and time, limiting near-term corporate profit expansion and raising operational execution risk across product mixes.

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

OSI Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 250.14
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 250.14 is below the 20-day moving average (MA) of 277.07, below the 50-day MA of 268.51, and above the 200-day MA of 241.21, indicating a neutral trend. The MACD of -0.47 indicates Positive momentum. The RSI at 34.70 is Neutral, neither overbought nor oversold. The STOCH value of 7.86 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$10.15B	78.27	8.12%	―	17.88%	91.41%
PLXS	74 Outperform	$5.33B	30.97	12.63%	―	1.82%	56.52%
VICR	71 Outperform	$7.04B	86.37	13.89%	―	11.55%	1745.46%
NOVT	70 Neutral	$4.81B	91.98	6.84%	―	4.07%	-12.34%
OSIS	68 Neutral	$4.12B	28.37	18.33%	―	9.37%	15.70%
ST	63 Neutral	$5.04B	-180.82	-0.92%	1.43%	-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.

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.

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.

The most recent analyst rating on (OSIS) stock is a Buy with a $315.00 price target. To see the full list of analyst forecasts on OSI Systems stock, see the OSIS Stock Forecast page.

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.

The most recent analyst rating on (OSIS) stock is a Buy with a $315.00 price target. To see the full list of analyst forecasts on OSI Systems stock, see the OSIS Stock Forecast page.

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.

The most recent analyst rating on (OSIS) stock is a Buy with a $315.00 price target. To see the full list of analyst forecasts on OSI Systems stock, see the OSIS Stock Forecast page.