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Outset Medical
(NASDAQ:OM)
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Rating:55Neutral
Price Target:
$5.50
▲(36.14% Upside)
Action:Reiterated
Date:08/07/26
Overall score reflects a company improving operationally but still constrained by losses and cash burn. The biggest drag is financial performance (large negative margins and negative free cash flow) despite better growth, gross margins, and sharply reduced leverage. Offsetting this, the latest earnings call was constructive (reiterated guidance, margin progress, controlled cash use, and the HCA refresh catalyst) and technicals show positive momentum. Valuation remains difficult to assess positively due to a negative P/E and no dividend yield support.
Positive Factors
Gross margin expansion
Sustained gross margin improvement (42.2% and a stated path to 50%) indicates improving product economics and operating leverage. Better unit margins reduce the scale needed to reach profitability, support durable cash generation as installed base grows, and make future margin targets achievable.
Negative Factors
Persistent negative cash flow
Continued negative operating and free cash flow requires reliance on existing cash or future financing until scale and margins convert to positive cash generation. This structural cash burn elevates execution risk and can force strategic tradeoffs if revenue or margin improvements stall.
Read all positive and negative factors
Positive Factors
Negative Factors
Gross margin expansion
Sustained gross margin improvement (42.2% and a stated path to 50%) indicates improving product economics and operating leverage. Better unit margins reduce the scale needed to reach profitability, support durable cash generation as installed base grows, and make future margin targets achievable.
Read all positive factors
Outset Medical (OM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$84.62M
Dividend YieldN/A
Average Volume (3M)259.55K
Price to Earnings (P/E)―
Beta (1Y)1.89
Revenue Growth2.01%
EPS Growth85.71%
CountryUS
Employees310
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)-4.09
Shares Outstanding18,537,241
10 Day Avg. Volume125,119
30 Day Avg. Volume259,552
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.44
Price to Sales (P/S)0.47
P/FCF Ratio-1.20
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$7.67Price Target Upside89.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)-2.91
Revenue Forecast (FY)$125.73M
Outset Medical Business Overview & Revenue Model
Company Description
Outset Medical, Inc. is a medical technology firm that specializes in developing hemodialysis systems. The company's primary product is the Tablo Hemodialysis System, a compact console designed to deliver dialysis treatment in various environments...
How the Company Makes Money
Outset Medical primarily makes money by selling (or placing) its Tablo Hemodialysis System and generating recurring revenue from ongoing usage of the installed base. Key revenue streams generally include: (1) Capital equipment revenue from Tablo s...
Outset Medical Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call portrays a predominantly positive commercial and operational trajectory: modest year-over-year revenue growth with strong sequential momentum, meaningful gross margin expansion, a significant $40M refresh agreement with HCA that establishes backlog, a strengthened balance sheet with controlled cash burn, notable implementation and customer success achievements, and an encouraging pilot for next-gen Tablo expected to drive future refresh cycles. Offsetting this optimism are near-term softness in consumables (down 12%), a small decline in product and recurring revenue, continued non-GAAP operating losses, and inherent capital-sales timing variability. On balance, the company communicated improving fundamentals and clear strategic catalysts that outweigh current headwinds.Positive Updates
Quarterly Revenue and Sequential Strength
Total revenue of $31.6 million in Q2, up 1% year-over-year and up 14% sequentially, demonstrating quarter-over-quarter momentum.
Negative Updates
Consumable Revenue Decline
Consumable revenue was $12.4 million, down 12% year-over-year (management cited a tough prior-year comp, milder flu season, and prior-year ordering cadence), creating drag on recurring revenue growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Quarterly Revenue and Sequential Strength
Total revenue of $31.6 million in Q2, up 1% year-over-year and up 14% sequentially, demonstrating quarter-over-quarter momentum.
Read all positive updates
Company Guidance
Outset reiterated full‑year 2026 revenue guidance of $125–$130 million (growth of ~5–9% vs. 2025), with most of the upside expected in Q3 and Q4 and management saying this outlook already factors in the $40 million HCA refresh agreement (extends through 2028). Supporting Q2 results included revenue of $31.6M (+1% YoY, +14% sequentially), console revenue $9.5M (+6% YoY), product revenue $21.9M (−5% YoY), consumables $12.4M (−12% YoY), recurring revenue $22.1M (−2% YoY), non‑GAAP gross margin 42.2% (on track to a 50% company‑wide milestone), non‑GAAP operating expenses $25.8M, non‑GAAP operating loss $12.4M (improved 7% YoY), ending cash of $151M, and Q2 cash use of $9.5M with the company on track to use < $40M for the full year. Management highlighted refresh tailwinds (an estimated refresh cycle of ~3,000 consoles and up to $150M in console revenue opportunity over the next several years), the next‑gen Tablo launch, and a formalized customer‑success program as drivers of future console, consumable and margin growth.Outset Medical Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
62
Positive
Cash Flow
28
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 117.80M | 119.48M | 113.69M | 130.38M | 115.38M | 102.60M |
| Gross Profit | 49.20M | 46.75M | 38.56M | 29.00M | 17.83M | 7.61M |
| EBITDA | -56.21M | -62.37M | -102.09M | -153.79M | -152.81M | -124.86M |
| Net Income | -74.29M | -81.65M | -127.98M | -172.80M | -162.96M | -131.94M |
Balance Sheet | ||||||
| Total Assets | 242.38M | 264.50M | 275.80M | 313.80M | 400.12M | 463.46M |
| Cash, Cash Equivalents and Short-Term Investments | 147.19M | 168.95M | 158.69M | 203.32M | 287.50M | 339.49M |
| Total Debt | 6.80M | 101.25M | 201.86M | 136.19M | 103.23M | 37.81M |
| Total Liabilities | 146.05M | 137.54M | 248.98M | 190.91M | 154.13M | 89.38M |
| Stockholders Equity | 96.34M | 126.95M | 26.82M | 122.89M | 245.99M | 374.08M |
Cash Flow | ||||||
| Free Cash Flow | -51.79M | -47.13M | -117.22M | -134.81M | -154.05M | -133.37M |
| Operating Cash Flow | -51.16M | -46.33M | -116.30M | -131.37M | -145.73M | -130.26M |
| Investing Cash Flow | 41.52M | -97.68M | 103.94M | 83.03M | -66.30M | -142.51M |
| Financing Cash Flow | 1.15M | 55.50M | 67.87M | 43.65M | 72.90M | 160.15M |
Outset Medical Technical Analysis
Positive
4.04
Price Trends
4.60
Positive
4.34
Positive
4.98
Negative
Market Momentum
0.16
Negative
54.96
Neutral
81.67
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OM, the sentiment is Positive. The current price of 4.04 is below the 20-day moving average (MA) of 4.55, below the 50-day MA of 4.60, and below the 200-day MA of 4.98, indicating a neutral trend. The MACD of 0.16 indicates Negative momentum. The RSI at 54.96 is Neutral, neither overbought nor oversold. The STOCH value of 81.67 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OM.
Outset Medical Risk Analysis
Outset Medical disclosed 79 risk factors in its most recent earnings report. Outset Medical reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Outset Medical Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $337.25M | 33.39 | 22.14% | ― | 16.79% | 45.17% | |
55 Neutral | $84.62M | -1.10 | -62.25% | ― | 2.01% | 85.71% | |
54 Neutral | $174.63M | -7.09 | -12.90% | ― | 3.39% | 19.78% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $137.32M | -2.56 | -120.77% | ― | 11.73% | 8.07% | |
46 Neutral | $68.20M | -0.86 | -51.88% | ― | 25.74% | -26.25% | |
40 Underperform | $31.89M | -0.73 | -77.48% | ― | -7.88% | -5535.71% |
* Healthcare Sector Average
OM
Outset Medical
4.90
-7.90
-61.72%
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Outset Medical Corporate Events
Business Operations and StrategyProduct-Related Announcements
Outset Medical Secures Multi‑Year HCA Hemodialysis Agreement
Positive
Jun 17, 2026
On June 14, 2026, Outset Medical, Inc. signed an amendment to its purchasing agreement with HCA Management Services, L.P., originally dated May 1, 2020, under which HCA will refresh its existing fleet of Tablo Hemodialysis Systems by purchasing ne...
Executive/Board ChangesShareholder Meetings
Outset Medical Shareholders Back Board and Governance Measures
Positive
Jun 5, 2026
On June 4, 2026, Outset Medical held its annual meeting of stockholders virtually, with a quorum representing roughly three-quarters of its 18.5 million outstanding shares. Shareholders elected Brent D. Lang and Karen Prange as Class III directors...
Executive/Board Changes
Outset Medical Announces Executive Vice President Marc Nash Departure
Neutral
May 29, 2026
On May 26, 2026, Outset Medical, Inc. announced that Marc Nash, its Executive Vice President of RD, Operations and Service, had informed the company of his decision to leave effective June 5, 2026, to pursue other professional opportunities. The c...
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.