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OSI Systems Rides on Order Wins & Solid Security Portfolio

Zacks Equity Research

OSI Systems, Inc. OSIS is benefiting from continued demand for its security solutions driven by airport security changes in Europe.

Recently, the company’s security division secured an order worth roughly $12 million to provide maintenance and operation services to Rapiscan Systems and AS&E security screening equipment. The company’s inspection system platforms enhance workplace safety and guard critical infrastructure.

The company’s security division has also won orders, worth approximately $15 million, for its Rapiscan RTT 110 (Real Time Tomography) Explosive Detection System (EDS) from a prominent logistics provider. Notably, RTT110 security inspection solution offers robust throughput capabilities that provide enhanced threat detection.

Further, OSI Systems’ Security division bagged a contract worth around $14 million from an international customer to provide cargo and vehicle inspection systems; and parcel and baggage inspection systems.

Moreover, contracts worth $15 million from an international port authority of its Rapiscan Eagle P60 high-energy X-ray cargo and vehicle inspection systems, remains noteworthy. The company will facilitate the installation of the inspection systems and follow up on maintenance and support.

Year-to-date Price Performance



Robust implementation of inspection systems is instilling optimism in OSI Systems’ stock. Notably, shares of the company have returned 38.1% year to date, outperforming the industry’s rally of 34.4%. In the same time frame, the stock has also fared better than the S&P 500 Index’s growth of 30%.

Strength in Portfolio Favors Growth Prospects

Growing clout of the company’s Rapiscan RTT 110 and Rapiscan Eagle P60 are expected to generate incremental revenues. This, in turn, will boost the Security division’s top line in the days ahead.

Further, border security is a top priority for governments worldwide. Notably, regulatory changes in Europe are expected to bolster equipment sales.

This is bolstering the demand for OSI Systems’ inspection systems, passenger and cargo screening products and related services at airports, port security and correctional centers.

Moreover, the company is working on integrated service projects including equipment, civil works, datacenter integration, training and follow-on services in the Middle East.

Also, new programs in Guatemala and Southeast Asia, and increasing infrastructure security spend hold promise.

Zacks Rank & Other Stocks to Consider

OSI Systems currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader sector are Keysight Technologies Inc. KEYS, Fortinet, Inc. FTNT and Marchex, Inc. MCHX. All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Keysight, Fortinet and Marchex is currently pegged at 9.1%, 14% and 15%, respectively.

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