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OSI Systems
(NASDAQ:OSIS)
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Rating:68Neutral
Price Target:
$225.00
▲(10.26% Upside)
Action:Reiterated
Date:08/22/26
OSIS scores highest on business/financial execution and outlook: profitability is solid, FY26 cash flow rebounded strongly, and the latest call featured positive FY27 growth/EPS guidance backed by record backlog. The score is held back primarily by rising leverage and a clearly negative technical trend (price below key moving averages with weak momentum). Valuation is acceptable at ~22x earnings but not compelling enough to offset the leverage and technical pressure.
Positive Factors
Record backlog supports FY27 growth visibility
The record backlog provides a substantial base for future deliveries, while FY27 guidance points to continued expansion. This improves revenue visibility over the next several quarters and supports planning across the Security, Healthcare, and Optoelectronics businesses.
Negative Factors
Higher leverage reduces balance-sheet flexibility
The substantial increase in debt, combined with lower equity, reduces the financial cushion available for acquisitions, investment, or unexpected operating setbacks. Although cash generation is currently strong, leverage may constrain flexibility if backlog conversion or margins weaken.
Read all positive and negative factors
Positive Factors
Negative Factors
Record backlog supports FY27 growth visibility
The record backlog provides a substantial base for future deliveries, while FY27 guidance points to continued expansion. This improves revenue visibility over the next several quarters and supports planning across the Security, Healthcare, and Optoelectronics businesses.
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
$3.30B
Dividend YieldN/A
Average Volume (3M)253.22K
Price to Earnings (P/E)22.4
Beta (1Y)1.51
Revenue Growth4.25%
EPS Growth4.70%
CountryUS
Employees7,806
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)9.24
Shares Outstanding15,941,968
10 Day Avg. Volume451,577
30 Day Avg. Volume253,217
Financial Highlights & Ratios
PEG Ratio54.43
Price to Book (P/B)4.54
Price to Sales (P/S)2.12
P/FCF Ratio15.40
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
$277.80Price Target Upside36.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)11.45
Revenue Forecast (FY)$1.92B
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 makes money primarily by selling products and systems, complemented by recurring and project-based services, across its three operating segments. (1) Security segment: Revenue is generated from the sale of security screening and inspec...
OSI Systems Earnings Call Summary
Earnings Call Date:Aug 20, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call conveyed multiple strong financial achievements — record backlog, record operating cash flow, record adjusted EPS, margin expansion, robust service and optoelectronics growth, and significant RF and CBP wins — that underpin a positive outlook and raised FY27 guidance. Offsetting these positives are notable near-term headwinds: geopolitically driven delivery delays in the Middle East (≈$50M deferred) and lower Mexico-related revenues (~$150M year-over-year impact), plus modest leverage from refinancing and buybacks. Management emphasized that delayed orders remain in backlog and expects much of the benefit to materialize in FY28 and beyond. On balance, the highlights materially outweigh the lowlights, though some near-term revenue timing risk remains.Positive Updates
Record Annual Revenue and Backlog
Full-year revenue of $1.79B (record) up 4% year-over-year; quarter revenue $484M. Ended fiscal 2026 with a record backlog of approximately $1.9B, providing strong visibility into FY27 and beyond.
Negative Updates
Revenue Below Prior Guidance Due to Middle East Delays
Full-year revenues finished below company guidance; Q4 revenues fell ~4% year-over-year to $484M. Approximately $50M of planned security deliveries were delayed beyond the June 30 fiscal year end due to conflict-related delays and site access constraints in the Middle East (management characterizes these as deferred, not lost).
Read all updates
Q4-2026 Updates
Positive
Negative
Record Annual Revenue and Backlog
Full-year revenue of $1.79B (record) up 4% year-over-year; quarter revenue $484M. Ended fiscal 2026 with a record backlog of approximately $1.9B, providing strong visibility into FY27 and beyond.
Read all positive updates
Company Guidance
For fiscal 2027 OSI guided revenues of $1.875–$1.93 billion (up 5.0%–8.1% YoY) and non‑GAAP diluted EPS of $11.13–$11.49 (up 7.5%–11.0% YoY), noting growth will be strongest in the second half and that the outlook assumes timing delays from the Middle East (≈$50M of deliveries deferred, not lost) and only a portion of recently awarded CBP IDIQ ceilings (a $21M task order has been received) will convert in FY27; management also expects the prior Mexico headwind to moderate to < $25M (concentrated in H1). The company expects strong double‑digit service revenue growth in FY27, believes free cash flow could exceed 100% of net income with continued strong operating cash flow (Q4 operating cash flow $182M; FY26 operating cash flow $276M), finished FY26 with a record ~$1.9B backlog, $360M cash and net leverage of ~2.1, and noted the guidance excludes impairments, restructuring, amortization of acquired intangibles, discrete tax items and other nonrecurring items; the board authorized an additional 1.0M share repurchase after Q4 repurchases of ~565k shares (avg ~$219; $123.6M) and ~1.1M shares repurchased/retired in the year.OSI Systems Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
70
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.79B | 1.71B | 1.54B | 1.28B | 1.18B |
| Gross Profit | 593.09M | 587.18M | 530.46M | 430.51M | 424.43M |
| EBITDA | 218.97M | 261.10M | 231.27M | 173.79M | 167.97M |
| Net Income | 154.71M | 149.64M | 128.15M | 91.78M | 115.35M |
Balance Sheet | |||||
| Total Assets | 2.50B | 2.24B | 1.94B | 1.56B | 1.44B |
| Cash, Cash Equivalents and Short-Term Investments | 359.83M | 106.41M | 95.35M | 76.75M | 64.20M |
| Total Debt | 1.00B | 682.32M | 552.38M | 393.09M | 393.31M |
| Total Liabilities | 1.67B | 1.29B | 1.07B | 829.52M | 804.73M |
| Stockholders Equity | 832.96M | 951.08M | 863.48M | 726.16M | 638.42M |
Cash Flow | |||||
| Free Cash Flow | 245.33M | 56.09M | -126.93M | 62.56M | 33.32M |
| Operating Cash Flow | 275.90M | 97.59M | -87.50M | 94.81M | 63.81M |
| Investing Cash Flow | -68.31M | -117.85M | -37.64M | -40.46M | -12.67M |
| Financing Cash Flow | 46.70M | 30.82M | 144.25M | -37.17M | -64.01M |
OSI Systems Technical Analysis
Negative
204.07
Price Trends
218.16
Negative
229.73
Negative
251.22
Negative
Market Momentum
-4.43
Positive
38.27
Neutral
61.98
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 204.07 is below the 20-day moving average (MA) of 217.56, below the 50-day MA of 218.16, and below the 200-day MA of 251.22, indicating a bearish trend. The MACD of -4.43 indicates Positive momentum. The RSI at 38.27 is Neutral, neither overbought nor oversold. The STOCH value of 61.98 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 |
|---|---|---|---|---|---|---|---|
81 Outperform | $28.11B | 29.27 | 9.13% | ― | 7.70% | 13.95% | |
68 Neutral | $3.30B | 22.36 | 17.59% | ― | 4.25% | 4.70% | |
67 Neutral | $6.38B | 34.98 | 12.46% | ― | 14.20% | 15.36% | |
63 Neutral | $39.14B | 41.66 | 18.71% | ― | 12.25% | 14.09% | |
63 Neutral | $10.06B | 34.33 | 12.57% | ― | 58.56% | 19.37% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | $52.61B | 60.78 | 8.37% | ― | 22.51% | ― |
* Technology Sector Average
OSIS
OSI Systems
206.62
-26.93
-11.53%
FLEX
Flex
107.89
52.23
93.84%
COHR
Coherent Corp
264.41
166.57
170.25%
PLXS
Plexus
242.07
103.10
74.19%
SANM
Sanmina-Sci
195.69
74.76
61.82%
TDY
Teledyne Technologies
607.87
58.84
10.72%
OSI Systems Corporate Events
Business Operations and StrategyStock BuybackFinancial DisclosuresPrivate Placements and Financing
OSI Systems Announces Record Results and Share Repurchase Plan
Positive
Aug 20, 2026
On August 20, 2026, OSI Systems reported record fiscal year 2026 revenues of $1.79 billion, record non-GAAP diluted EPS of $10.35, and record operating cash flow of $276 million, despite Middle East conflicts delaying certain Security division del...
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.