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Should You Continue to Retain OMCL Stock in Your Portfolio Now?
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Omnicell (OMCL - Free Report) is moving closer to achieving the industry-defined vision of Autonomous Pharmacy through automation and advanced services across its cloud-based platform. The company is on track to meet its 2025 financial goals, supported by increasing tech services and long-term customer partnerships. Its strategic expansion into new regions is also encouraging. However, headwinds from competitive pressures and macroeconomic challenges could adversely affect the company’s performance.
In the past year, this Zacks Rank #3 (Hold) stock has declined 20.8% compared to the 6.1% fall of the industry and the 21.1% growth of the S&P 500 composite.
The renowned healthcare technology company has a market capitalization of $2.05 billion. Omnicell surpassed estimates in all the trailing four quarters, delivering an average earnings surprise of 122.04%.
Tailwinds for OMCL Stock
Autonomous Pharmacy Model Holds Potential: Omnicell is aiming to achieve the industry vision of Autonomous Pharmacy with its medication management infrastructure. By delivering automation, intelligence and advanced services through a single, cloud-based platform, the company is empowering healthcare and pharmacy providers to increase healthcare value and improve patient outcomes. Among its key Point-of-Care product market, the company expects further expansion as customers increase the use of dispensing systems within their hospitals and ambulatory care settings.
The Central Pharmacy and IV Compounding market offers significant automation opportunities for high volumes of manual, repetitive and error-prone processes. Meanwhile, in the Retail, Institutional and Payer markets, the shift toward outpatient care from convenient settings also presents a big opportunity.New technologies and increasing pharmacist roles are spurring innovation and clinical services in retail pharmacies. This, along with value-based care, is expected to drive the adoption of Omnicell’s patient engagement solutions.
2025 Roadmap Looks Impressive: Omnicell is aiming to reach $1.9 billion-$2 billion of revenues by 2025, representing 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 delivered a non-GAAP EBITDA of $40 million in the second quarter of 2024, outpacing the previous guidance. Non-GAAP earnings per share benefitted from robust revenue execution, and strong cost and operating expense management. Driven by factors like growing tech services revenues, benefits from long-term sole source customer partnerships and more, the company looks poised to deliver on the 2025 total revenue growth targets.
Image Source: Zacks Investment Research
Planned Geographic Expansion Another Upside: Healthcare providers outside the United States are becoming increasingly aware of the benefits of automation, with substantial demand for adherence packaging equipment. Many government and private entities are heavily investing in information technology and automation, inspired by the recent advancements in the United States. Omnicell intends to strategically expand into new markets, given that the international market is less than 1% penetrated with very few hospitals adopting medication control systems. Presently, the company’s efforts are centered in Canada, Europe, the Middle East and the Asia-Pacific regions and supply chain efforts in Asia.
Concerns for OMCL Stock
Competitive Landscape: Omnicell faces intense competition in the medication management and supply chain solutions market from major players such as Becton Dickinson, ARxIUM. Direct competitors like AutoMed Technologies, Inc. (a subsidiary of ARxIUM) and RX Systems, Inc. also pose threats as they spearhead several expansion programs. This increased competition could result in pricing pressure and reduced margins for the company.
Macroeconomic Issues: Heightened inflationary pressures, supply chain disruptions, labor shortages and geopolitical instability are affecting the broader U.S. and global economies. These can potentially 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. Simultaneously, Omnicell is navigating the ongoing healthcare capital budget and labor constraints, which have continued to impact its Point-of-Care product line. However, health system budget improvements are not likely to favor Omnicell’s revenues immediately.
OMCL Estimate Trend
The Zacks Consensus Estimate for OMCL’s 2024 earnings per share has increased 12.9% to $1.40 in the past 30 days.
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $1.08 billion. This suggests a 5.8% fall from the year-ago reported number.
TransMedix Group’s earnings are expected to surge 257.1% in 2024. Its shares have soared 127.9% compared with the industry’s 13.9% rise in the past year.
TMDX’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 287.5%.
AxoGen has an estimated 2024 earnings growth rate of 94.1% compared with the industry’s 12.9%. Shares of the company have soared 126.3% compared with the industry’s 13.9% rise over the past year.
AXGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 96.5%.
Boston Scientific has an estimated earnings growth rate of 17.1% compared with the industry’s 14.8%. Shares of the company have rallied 52.2% compared with the industry’s 16.9% rise over the past year.
BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.
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Should You Continue to Retain OMCL Stock in Your Portfolio Now?
Omnicell (OMCL - Free Report) is moving closer to achieving the industry-defined vision of Autonomous Pharmacy through automation and advanced services across its cloud-based platform. The company is on track to meet its 2025 financial goals, supported by increasing tech services and long-term customer partnerships. Its strategic expansion into new regions is also encouraging. However, headwinds from competitive pressures and macroeconomic challenges could adversely affect the company’s performance.
In the past year, this Zacks Rank #3 (Hold) stock has declined 20.8% compared to the 6.1% fall of the industry and the 21.1% growth of the S&P 500 composite.
The renowned healthcare technology company has a market capitalization of $2.05 billion. Omnicell surpassed estimates in all the trailing four quarters, delivering an average earnings surprise of 122.04%.
Tailwinds for OMCL Stock
Autonomous Pharmacy Model Holds Potential: Omnicell is aiming to achieve the industry vision of Autonomous Pharmacy with its medication management infrastructure. By delivering automation, intelligence and advanced services through a single, cloud-based platform, the company is empowering healthcare and pharmacy providers to increase healthcare value and improve patient outcomes. Among its key Point-of-Care product market, the company expects further expansion as customers increase the use of dispensing systems within their hospitals and ambulatory care settings.
The Central Pharmacy and IV Compounding market offers significant automation opportunities for high volumes of manual, repetitive and error-prone processes. Meanwhile, in the Retail, Institutional and Payer markets, the shift toward outpatient care from convenient settings also presents a big opportunity.New technologies and increasing pharmacist roles are spurring innovation and clinical services in retail pharmacies. This, along with value-based care, is expected to drive the adoption of Omnicell’s patient engagement solutions.
2025 Roadmap Looks Impressive: Omnicell is aiming to reach $1.9 billion-$2 billion of revenues by 2025, representing 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 delivered a non-GAAP EBITDA of $40 million in the second quarter of 2024, outpacing the previous guidance. Non-GAAP earnings per share benefitted from robust revenue execution, and strong cost and operating expense management. Driven by factors like growing tech services revenues, benefits from long-term sole source customer partnerships and more, the company looks poised to deliver on the 2025 total revenue growth targets.
Image Source: Zacks Investment Research
Planned Geographic Expansion Another Upside: Healthcare providers outside the United States are becoming increasingly aware of the benefits of automation, with substantial demand for adherence packaging equipment. Many government and private entities are heavily investing in information technology and automation, inspired by the recent advancements in the United States. Omnicell intends to strategically expand into new markets, given that the international market is less than 1% penetrated with very few hospitals adopting medication control systems. Presently, the company’s efforts are centered in Canada, Europe, the Middle East and the Asia-Pacific regions and supply chain efforts in Asia.
Concerns for OMCL Stock
Competitive Landscape: Omnicell faces intense competition in the medication management and supply chain solutions market from major players such as Becton Dickinson, ARxIUM. Direct competitors like AutoMed Technologies, Inc. (a subsidiary of ARxIUM) and RX Systems, Inc. also pose threats as they spearhead several expansion programs. This increased competition could result in pricing pressure and reduced margins for the company.
Macroeconomic Issues: Heightened inflationary pressures, supply chain disruptions, labor shortages and geopolitical instability are affecting the broader U.S. and global economies. These can potentially 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. Simultaneously, Omnicell is navigating the ongoing healthcare capital budget and labor constraints, which have continued to impact its Point-of-Care product line. However, health system budget improvements are not likely to favor Omnicell’s revenues immediately.
OMCL Estimate Trend
The Zacks Consensus Estimate for OMCL’s 2024 earnings per share has increased 12.9% to $1.40 in the past 30 days.
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $1.08 billion. This suggests a 5.8% fall from the year-ago reported number.
Top MedTech Stocks
Some other top-ranked stocks in the broader medical space are TransMedix Group (TMDX - Free Report) , AxoGen (AXGN - Free Report) and Boston Scientific (BSX - Free Report) . While TransMedix Group currently sports a Zacks Rank #1 (Strong Buy), AxoGen and Boston Scientific carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
TransMedix Group’s earnings are expected to surge 257.1% in 2024. Its shares have soared 127.9% compared with the industry’s 13.9% rise in the past year.
TMDX’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 287.5%.
AxoGen has an estimated 2024 earnings growth rate of 94.1% compared with the industry’s 12.9%. Shares of the company have soared 126.3% compared with the industry’s 13.9% rise over the past year.
AXGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 96.5%.
Boston Scientific has an estimated earnings growth rate of 17.1% compared with the industry’s 14.8%. Shares of the company have rallied 52.2% compared with the industry’s 16.9% rise over the past year.
BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.