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On Aug 17, we issued an updated research report on Omnicell, Inc. OMCL. The company announced its strategy of expanding into new markets. However, a tough competitive landscape is a dampener.
Over the past six months, Omnicell’s shares have underperformed the industry it belongs to. The stock has lost 20% against the industry’s 7.5% rise.
In second-quarter 2020, Omnicell continued to see some delays in product bookings. The company noted that it is witnessing slowdown in purchasing decisions by hospitals.
It expects to see lower product bookings and revenues through the rest of 2020 compared to what management had expected prior to the COVID-19 outbreak. Additionally, the company’s ability to access hospitals in order to perform implementations of capital equipment has been delayed in some cases.
Omnicell, Inc. Price
Omnicell, Inc. price | Omnicell, Inc. Quote
Since Omnicell is currently unable to gauge the scope, duration and impact of the pandemic and is also uncertain about the timing of global recovery and economic normalization, it could not provide full-year guidance this time as well.
Contraction of both margins in the last-reported quarter was discouraging as well. The company’s inability to provide full-year guidance this time as well raises concerns. Other headwinds in the form of a stiff competitive landscape and tough hospital spending trends continue to bother the company.
On a positive note, the company’s optimism about the gradual resumption of elective surgeries and some on-site sales activities in regions less impacted by the pandemic is encouraging. The improvement in Service and other revenues despite the pandemic-led business challenges is impressive.
Further, as a major milestone, Omnicell recently introduced fully Autonomous Pharmacy, Omnicell One, which will be available from August. Leveraging cloud-based data and predictive prescriptive analytics, Omnicell One provides real-time visibility with actionable insights and workflow optimization recommendations that will help improve clinical, financial and operational outcomes across the pharmacy supply chain.
Zacks Rank & Key Picks
The stock carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the broader medical space are QIAGEN N.V. QGEN, Thermo Fisher Scientific Inc. TMO and Hologic, Inc. HOLX.
QIAGEN’s long-term earnings growth rate is estimated at 22.3%. It currently sports a Zacks Rank #1. (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher’s long-term earnings growth rate is estimated at 15%. It currently carries a Zacks Rank #2 (Buy).
Hologic’s long-term earnings growth rate is estimated at 15.5%. The company presently sports a Zacks Rank #1.
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Omnicell, Inc. (OMCL) : Free Stock Analysis Report
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QIAGEN N.V. (QGEN) : Free Stock Analysis Report
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