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Omnicell (OMCL) Banks on Product Launches, Global Growth
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Omnicell (OMCL - Free Report) continues to successfully execute its long-term strategy to transform the pharmacy care delivery model. Its 2025 roadmap looks impressive. The stock sports a Zacks Rank #1 (Strong Buy) currently.
Omnicell strategizes to offer differentiated, innovative solutions, expand into new markets, grow through strategic partnerships and acquire new technologies. The company successfully increased its installed base of Point of Care connected devices through market share gains in the past three years. At the American Society of Health-System Pharmacists 2023, Omnicell launched the XT console upgrade as part of a broader strategy toward a planned XT product refresh. In 2024, the XT platform innovation pipeline will include key product enhancements and services designed to improve medication management.
Omnicell remains a key player in automating and modernizing global medication management infrastructure. The company shifted to cloud-based solutions and tech-enabled services through the launches of Inventory Optimization Service (formerly Omnicell One) and Central Pharmacy Dispensing Services. The 2020 acquisition of PSG 340B Link business (now called Omnicell 340B) was a notable step for the company to transform the pharmacy care delivery model through technology.
Meanwhile, Omnicell’s Advanced Services offering, designed to help transform pharmacy care, is gaining recognition from health systems across the country. As an example, Kentucky-based Baptist Health adopted Omnicell’s Central Pharmacy Dispensing Service last year.
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Outside the United States, healthcare providers are becoming increasingly aware of the benefits of automation. Additionally, there is a substantial demand for adherence packaging equipment outside the domestic market. Many government and private entities are aware of the progress made over the last several years in the United States and are investing significantly in information technology and automation.
The company’s international operations include its sales efforts centered in Canada, Europe, the Middle East and the Asia-Pacific regions and supply chain efforts in Asia. Given the fact that the international market is less than 1% penetrated, with a few hospitals adopting medication control systems, Omnicell intends to expand into new markets, which it views as strategic.
In terms of its 2025 financial roadmap, Omnicell is targeting to reach $1.9 billion-$2 billion of revenues by 2025, at a CAGR of 14%-15% in the 2021-2025 period. Additional targets include a non-GAAP gross margin of 52%-53% and a non-GAAP EBITDA margin of approximately 23%. The company is well-positioned to deliver on the 2025 total revenue growth targets, driven by factors like growing its tech services revenue, benefits from long-term sole source customer partnerships, multi-year co-development plans and increased average deal sizes.
In the first quarter of 2024, the company delivered non-GAAP EBITDA of $11 million, above the guidance range of ($2) million and $4 million. Non-GAAP earnings per share of 3 cents exceeded the pre-announced guidance (a loss of 10 cents to breakeven earnings) due to better-than-expected revenues and strong cost and operating expense management.
On the flip side, the broader U.S. and global economy are facing elevated inflationary pressures, continued supply chain disruptions, labor shortages and geopolitical instability. Political unrest and hostilities, such as the ongoing conflicts between Russia and Ukraine or between Israel and Hamas, have brought major complexities to Omnicell’s international operations. Economic downturns have historically lowered demand for Omnicell’s goods and services, reduced government spending, and led to rising inflation, and higher interest rates, among others. All of these factors can lead to higher costs for the company’s raw materials and other components, which it may not be able to offset from customers through higher prices.
Omnicell’s gross profit plunged 25.9% in the first quarter of 2024. Simultaneously, the company is navigating the ongoing healthcare system capital budget and labor constraints, which have continued to impact its Point-of-Care product line. The challenging environment for some of the health system customers has contributed to the year-over-year decrease in the company’s revenues. While there are positive signs of stabilization and increased spending on capital projects in 2024, challenges such as high labor and operating costs are likely to persist across the industry.
Hims & Hers Heath shares have surged 132.8% in the past year. Estimates for the company’s earnings have increased from 19 cents to 20 cents for 2024 and from 35 cents to 38 cents for 2025 in the past seven days.
HIMS’ earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 79.2%. In the last reported quarter, it posted an earnings surprise of a staggering 150%.
Estimates for ResMed’s fiscal 2024 earnings per share have remained constant at $7.70 in the past 30 days. Shares of the company have plunged 11.8% in the past year compared with the industry’s decline of 2.2%.
RMD’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.8%. In the last reported quarter, it delivered an earnings surprise of 10.9%.
Estimates for Medpace’s 2024 earnings per share have remained constant at $11.29 in the past 30 days. Shares of the company have surged 69.2% in the past year compared with the industry’s 5.3% growth.
MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.8%. In the last reported quarter, it delivered an earnings surprise of 30.6%.
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Omnicell (OMCL) Banks on Product Launches, Global Growth
Omnicell (OMCL - Free Report) continues to successfully execute its long-term strategy to transform the pharmacy care delivery model. Its 2025 roadmap looks impressive. The stock sports a Zacks Rank #1 (Strong Buy) currently.
Omnicell strategizes to offer differentiated, innovative solutions, expand into new markets, grow through strategic partnerships and acquire new technologies. The company successfully increased its installed base of Point of Care connected devices through market share gains in the past three years. At the American Society of Health-System Pharmacists 2023, Omnicell launched the XT console upgrade as part of a broader strategy toward a planned XT product refresh. In 2024, the XT platform innovation pipeline will include key product enhancements and services designed to improve medication management.
Omnicell remains a key player in automating and modernizing global medication management infrastructure. The company shifted to cloud-based solutions and tech-enabled services through the launches of Inventory Optimization Service (formerly Omnicell One) and Central Pharmacy Dispensing Services. The 2020 acquisition of PSG 340B Link business (now called Omnicell 340B) was a notable step for the company to transform the pharmacy care delivery model through technology.
Meanwhile, Omnicell’s Advanced Services offering, designed to help transform pharmacy care, is gaining recognition from health systems across the country. As an example, Kentucky-based Baptist Health adopted Omnicell’s Central Pharmacy Dispensing Service last year.
Image Source: Zacks Investment Research
Outside the United States, healthcare providers are becoming increasingly aware of the benefits of automation. Additionally, there is a substantial demand for adherence packaging equipment outside the domestic market. Many government and private entities are aware of the progress made over the last several years in the United States and are investing significantly in information technology and automation.
The company’s international operations include its sales efforts centered in Canada, Europe, the Middle East and the Asia-Pacific regions and supply chain efforts in Asia. Given the fact that the international market is less than 1% penetrated, with a few hospitals adopting medication control systems, Omnicell intends to expand into new markets, which it views as strategic.
In terms of its 2025 financial roadmap, Omnicell is targeting to reach $1.9 billion-$2 billion of revenues by 2025, at a CAGR of 14%-15% in the 2021-2025 period. Additional targets include a non-GAAP gross margin of 52%-53% and a non-GAAP EBITDA margin of approximately 23%. The company is well-positioned to deliver on the 2025 total revenue growth targets, driven by factors like growing its tech services revenue, benefits from long-term sole source customer partnerships, multi-year co-development plans and increased average deal sizes.
In the first quarter of 2024, the company delivered non-GAAP EBITDA of $11 million, above the guidance range of ($2) million and $4 million. Non-GAAP earnings per share of 3 cents exceeded the pre-announced guidance (a loss of 10 cents to breakeven earnings) due to better-than-expected revenues and strong cost and operating expense management.
On the flip side, the broader U.S. and global economy are facing elevated inflationary pressures, continued supply chain disruptions, labor shortages and geopolitical instability. Political unrest and hostilities, such as the ongoing conflicts between Russia and Ukraine or between Israel and Hamas, have brought major complexities to Omnicell’s international operations. Economic downturns have historically lowered demand for Omnicell’s goods and services, reduced government spending, and led to rising inflation, and higher interest rates, among others. All of these factors can lead to higher costs for the company’s raw materials and other components, which it may not be able to offset from customers through higher prices.
Omnicell’s gross profit plunged 25.9% in the first quarter of 2024. Simultaneously, the company is navigating the ongoing healthcare system capital budget and labor constraints, which have continued to impact its Point-of-Care product line. The challenging environment for some of the health system customers has contributed to the year-over-year decrease in the company’s revenues. While there are positive signs of stabilization and increased spending on capital projects in 2024, challenges such as high labor and operating costs are likely to persist across the industry.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Hims & Hers Health (HIMS - Free Report) , ResMed (RMD - Free Report) and Medpace (MEDP - Free Report) . While Hims & Hers Health sports a Zacks Rank #1, ResMed and Medpace carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
Hims & Hers Heath shares have surged 132.8% in the past year. Estimates for the company’s earnings have increased from 19 cents to 20 cents for 2024 and from 35 cents to 38 cents for 2025 in the past seven days.
HIMS’ earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 79.2%. In the last reported quarter, it posted an earnings surprise of a staggering 150%.
Estimates for ResMed’s fiscal 2024 earnings per share have remained constant at $7.70 in the past 30 days. Shares of the company have plunged 11.8% in the past year compared with the industry’s decline of 2.2%.
RMD’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.8%. In the last reported quarter, it delivered an earnings surprise of 10.9%.
Estimates for Medpace’s 2024 earnings per share have remained constant at $11.29 in the past 30 days. Shares of the company have surged 69.2% in the past year compared with the industry’s 5.3% growth.
MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.8%. In the last reported quarter, it delivered an earnings surprise of 30.6%.