A month has gone by since the last earnings report for Omnicell, Inc. OMCL. Shares have added about 3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Omnicell reported a breakeven in fourth-quarter 2016, a deterioration from the year-ago earnings of $0.05.
Adjusted earnings per share (EPS) however came in at $0.26 (considering stock-based compensation expense as a regular one), down 23.5% year over year.
The Zacks Consensus Estimate for the EPS figure was $0.07.
For full-year 2016, the company’s reported figure came in at $0.02 per share, substantially below $0.84 recorded in the prior year. Adjusted EPS figure for the full year came in at $1.13, up 4.6% from the prior year.
The Zacks Consensus Estimate for full-year 2016 EPS was $0.08.
Revenues in Detail
Revenues during the fourth quarter surged 32% year over year to $172 million, missing the Zacks Consensus Estimate of $181 million.
According to management, the company witnessed strong demand for Aesynt products in the fourth quarter on account of both expansion and upgrades by existing customers, as well as new and competitive conversion customers. Strength has been noted particularly in the combined product portfolio, which offers tailored and scalable solutions for customers.
Full-year 2016 revenues came in at $692.6 million, up 43% year over year but below the Zacks Consensus Estimate of $704.5 million.
On a segmental basis, Omnicell’s Automation and Analytics segment’s revenues increased 35.6% during the fourth quarter to $143.5 million. The year-over-year upside was driven by the acquisition of Aesynt and organic growth.
Meanwhile, revenues at the Medication Adherence segment improved by 15.9% to $28.3 million.
Omnicell's gross profit during the reported quarter was up 14.2% to $74.3 million. Gross margin, however, contracted 672 basis points (bps) to 43.2%.
Adjusted operating expenses in the fourth quarter shot up 40.3% to $74.5 million. Adjusted operating income in the quarter was $1.8 million, down 101.5% from the adjusted operating profit of $11.9 million in the year-ago quarter. Operating margin also contracted a massive 929 bps to 0.1%.
Omnicell exited fiscal 2016 with cash and cash equivalents of $54.4 million, compared with $82.2 million in the prior year. Full-year 2016 operating cash flow was $47.9 million compared with $33.7 million in 2015.
For full-year 2017, Omnicell expects product bookings in the range of $570–$590 million. The company expects adjusted revenue (including acquisition accounting impact related to deferred revenues) between $740 million and $760 million. Adjusted earnings are forecasted in the band of $1.32–$1.42 per share.
For the first quarter of 2017, management expects adjusted revenue (including acquisition accounting impact related to deferred revenue) in the band of $150–$155 million. Omnicell expects first-quarter 2017 adjusted earnings up to $0.04 per share.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter. In the past month, the consensus estimate also shifted downward by 433.3% due to these changes.
Omnicell, Inc. Price and Consensus
Omnicell, Inc. Price and Consensus | Omnicell, Inc. Quote
At this time, Omnicell's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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