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what it is
OSI Systems makes scanners, medical monitors, and specialty parts for security, healthcare, defense, and aerospace buyers.
how it gets paid
Last year Osi Systems made $1.7B in revenue.
why it's growing
Revenue grew 239.3% last year. Revenue was up 83% vs. prior year, and gross margin held at 32.4%.
what just happened
OSI Systems posted $849M in quarterly revenue, and adjusted EPS landed above forecasts.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
65/100 earnings predictability — reasonably predictable
31.6x trailing p/e — you're paying up for this one
12.0% return on capital — nothing to write home about
xvary composite: 60/100 — average
What they do
OSI Systems makes scanners, medical monitors, and specialty parts for security, healthcare, defense, and aerospace buyers.
The moat is contracts and compliance, not magic. Security work leans on the 100% cargo and vehicle screening mandate at major ports and borders. If your bags, pallets, and trucks must be checked, switching vendors hurts, and 6,450 employees keep the rollout moving.
How they make money
$1.7B
annual revenue · their business grew +239.3% last year
total revenue
$1.7B
+239.3%
The products that matter
medical monitoring and diagnostics
Patient Care
~80% of revenue
this segment drives roughly 80% of the $849M revenue base. if it stays healthy, it funds the rest of the story.
center of gravity
cargo and vehicle screening systems
Security
~20% of revenue
it's the smaller piece today, but management is explicitly leaning on security bookings and border screening demand to support the fiscal 2026 recovery.
recovery engine
service contract mix shift
Services and Support
2027 target
by 2027, the company wants more long-term service contracts and less reliance on one-time hardware sales. that's the margin quality upgrade the market wants to see.
less lumpiness
Key numbers
$1.7B
annual sales
That is a real business, not a lab project. It also gives the company room to sell across three markets.
31.6x
trailing p/e
You pay 31.6 times last year's earnings. That is rich unless growth keeps up.
19.0%
operating margin
For every $100 of sales, OSIS keeps $19 before taxes and interest.
12.0%
return on capital
The business earns $12 for every $100 tied up in the business.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 65 / 100
- long-term debt $437M (9% of capital)
- net profit margin 11.0% — keeps 11 cents of every dollar in revenue
- return on equity 14% — $0.14 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in OSIS 3 years ago → it's now worth $28,740.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
OSI Systems posted $849M in quarterly revenue, and adjusted EPS landed above forecasts.
Revenue was up 83% vs. prior year, and gross margin held at 32.4%. That mix says demand is strong and the factory still has pricing power.
$425M
revenue
$2.58
eps
32.4%
gross margin
adjusted EPS
The $2.58 adjusted EPS print mattered because it beat forecasts and showed the profit engine still worked.
-
osi systems should post record fiscal 2026 second-quarter financial results. (year ends june 30th.) the specialized electronic components and systems provider should generate sales around $450 million, up 7% vs. prior year, while adjusted earnings are likely to grow 13%, to $2.50 per share.we expect strong growth across each of the company’s divisions as well as continued robust security division bookings. (second-quarter results were set to be released shortly after this issue went to press.) the company has increased its fiscal 2026 guidance.
-
revenue is now projected to range between $1.825 billion and $1.867 billion, or 6.5% to 9% growth, with adjusted earnings of $10.35 a share at the midpoint.this compares to the previous revenue range of $1.805 billion and $1.850 billion and adjusted earnings of $10.25 per share.
-
moving forward, osi should benefit from the multi-year tailwinds in security.
-
more specifically, they are the mandate for 100% cargo and vehicle screening at all major ports and borders.by 2027, the company aims to have further diversified its revenue streams in the security division, reducing its reliance on lumpy, one-time hardware sales in favor of long-term, high-margin service contracts that provide steady, predictable cash flows.
-
our presentation now reflects the adoption of non-gaap earnings.
source: company earnings report, 2026
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What could go wrong
the #1 risk is patient care concentration colliding with a priced-in turnaround. when one segment drives roughly 80% of revenue, you do not get many free misses.
med
patient care does too much of the carrying
Patient care supplies about 80% of revenue. If hospital demand softens or margins slip there, the rest of the portfolio is not large enough to hide it.
That concentration puts most of the $849M revenue base on one segment's shoulders.
med
security bookings need to become revenue
The recovery story leans on security division bookings, cargo screening mandates, and a shift toward service contracts by 2027. Bookings are encouraging. Revenue is what gets the multiple paid.
If fiscal 2026 lands below the $1.825B–$1.867B guidance band, the stock's 31.6x trailing multiple gets harder to defend.
med
adjusted earnings can flatter the picture
Management's presentation now emphasizes non-gaap earnings. That can be useful, but it also means you need to separate operational improvement from accounting cleanup.
The company is guiding to $10.35 in adjusted EPS. If the adjusted story improves while cash conversion does not, you are paying a premium for optics.
Between revenue concentration, execution risk on security, and a premium valuation, this is a business that needs the comeback to keep arriving in the reported numbers.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
the revenue guide
management guided to $1.825B–$1.867B for fiscal 2026. if you stop seeing progress toward that band, the recovery narrative loses its anchor.
trend
security bookings
this is the diversification story in one line item. stronger bookings need to turn into recognized revenue, not just hopeful commentary.
risk
patient care concentration
patient care still drives roughly 80% of revenue. if that share stays this high into 2027, the mix-improvement story is moving slower than promised.
calendar
adjusted EPS versus reported quality
the company is now presenting around non-gaap earnings. each quarter, check whether the improvement shows up beyond the adjusted headline.
Analyst rankings
short-term outlook
average
momentum score 3. in human-speak, analysts see a stock acting normal after a big rebound, not one screaming fresh upside.
risk profile
average
stability score 3. This sits near the market middle — not a bunker stock, not a grenade.
chart momentum
average
technical score 3. the stock has already had its dramatic move from the low. now it needs business results to take over.
earnings predictability
65 / 100
predictable enough to model, uneven enough that a miss will still matter.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 162 buyers vs. 179 sellers in 3q2025. total institutional holdings: 18.8M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$203
$448
$275
current price
$326
target midpoint · +19% from current · 3-5yr high: $455 (+65% · 13% ann'l return)
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