OSI Systems (OSIS) Rides on Expanding Order Book, Clientele
OSI Systems OSIS shares have surged 49.5% year-to-date, outperforming the Zacks Computer & Technology sector’s gain of 46.3%. The company is benefiting from strong clientele and expanding order books.
OSIS segments — Optoelectronics and Manufacturing and Security — are benefiting from recent order wins from OEMs.
The Security division was awarded a contract valued at approximately $5 million from a Latin American customer to provide cargo and vehicle inspection solutions.
Eagle P60 high-energy, drive-through cargo and vehicle inspection system, Z Portal high-throughput, drive-through inspection system and the VM500 drive-through radiation monitoring portal are the solutions that OSIS will offer as part of the deal.
The Security division also received an international order for nearly $15 million to provide multiple units of its various checkpoint screening solutions. Systems to be provided include the Orion 920CT checkpoint screening system, Orion 920DX dual view checkpoint screening system and Itemiser 5X explosive trace detection system.
OSI Systems’ Optoelectronics and Manufacturing division has received orders totaling nearly $5 million to provide electronic assemblies to a leading motion control and fluid technology OEM. The same division received multiple orders for approximately $4 million in aggregate to provide missile guidance and detection components to a leading defense electronics OEM.
OSI Systems, Inc. Price and Consensus
OSI Systems, Inc. price-consensus-chart | OSI Systems, Inc. Quote
OSIS’ Healthcare division — Spacelabs Healthcare — received an order valued at approximately $3 million to provide patient monitoring solutions and related accessories to a U.S.-based hospital. The division also received an order valued at roughly $4 million to provide patient monitoring solutions and related accessories to a U.S.-based hospital.
Spacelabs Healthcare offers systems, including Xhibit Central Stations with XTR Telemetry and Qube bedside patient monitors.
OSI Systems’ Prospects Strong
OSIS Security division reported a terrific first-quarter fiscal 2024, with revenues growing double-digit and operating margins expanding significantly year over year. It fully offset the challenging performance of the Healthcare segment in the fiscal quarter.
OSI Systems exited the reported quarter with a backlog of nearly $1.8 billion, particularly in the Security and Optoelectronics and Manufacturing divisions. The company also expects more robust performance from Healthcare in the rest of fiscal 2024.
For fiscal 2024, revenues are expected to increase more than 18% over fiscal 2023, while earnings are expected to increase more than 27% year over year.
The Zacks Consensus Estimate for fiscal 2024 revenues of $1.51 billion, indicating 17.83% year-over-year growth. The consensus estimates for earnings of $7.90 per share increased 1.4% over the past 30 days.
Zacks Rank & Other Stocks to Consider
Currently, OSI Systems has a Zacks Rank #2 (Buy).
NVIDIA NVDA, NetEase NTES and Intel INTC are other top-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NVDA, NTES and INTC shares have returned 238.4%, 60.4% and 64.9%, respectively, on a year-to-date basis.
Long-term earnings growth rates for NVIDIA, NetEase and Intel are pegged at 13.5%,15.98 and 14.18%, respectively.
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