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Here's Why Investors Should Retain Omnicell (OMCL) Stock Now
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Omnicell, Inc. (OMCL - Free Report) is gaining from robust performance across its operating segments. The company recorded better-than-expected results for the first quarter of 2022. The launch of the latest generation of IV compounding robot IVX to power Omnicell’s IV Compounding Service instills optimism. A strong solvency position is another upside. However, stiff competition and mounting operating expenses raise apprehension.
In the past year, the Zacks Rank #3 (Hold) stock has declined 20.1% compared with a 46.7% fall of the industry and a 2.9% drop of the S&P 500.
The renowned medical device solutions provider has a market capitalization of $4.81 billion. Its first-quarter 2022 earnings beat the Zacks Consensus Estimate by 16.9%.
In the past five years, the company registered earnings growth of 44.6%, ahead of the industry’s 16.3% rise and the S&P 500’s 13.4% increase. The long-term expected growth rate is estimated at 20% compared with the industry’s projection of 21.9% and the S&P 500’s projected 10.7% growth.
Image Source: Zacks Investment Research
Let’s delve deeper.
Factors At Play
Q1 Upsides: Omnicell exited the first quarter with earnings and revenues ahead of the Zacks Consensus Estimate. The top line was driven by strong revenue contributions from the company’s operating segments. The ongoing robust demand for Omnicell’s medication management solutions buoys optimism. The revenue contributions from the latest acquisitions of FDS Amplicare, ReCept and MarkeTouch Media also instill investors’ confidence. The company raised its adjusted EPS guidance for 2022, portraying consistent growth momentum.
Autonomous Pharmacy Model Holds Potential: Omnicell has an elaborate vision for the autonomous pharmacy. As a major milestone in this niche, the company introduced Omnicell One, which leverages cloud-based data and predictive prescriptive analytics to provide real-time visibility with actionable insights and workflow optimization recommendations. These insights and recommendations help improve clinical, financial and operational outcomes across the pharmacy supply chain. The Omnicell One was recently leveraged by the University Health in San Antonio and an Ohio-based health system partner.
In the first quarter, Omnicell launched the IVX Station, which offers a differentiated approach to allow IV compounding at scale while reducing errors related to manual processes and lowering the high cost of outsourcing.
Strong Solvency: Omnicell exited first-quarter 2022 with cash and cash equivalents of $265 million. The company did report any debt on its balance sheet at the end of the first quarter, indicating strong solvency. This is good news regarding the company’s solvency position, particularly during the year of economic downturn, when it is majorly facing manufacturing and supply disruptions globally.
Downsides
Rising Operating Expenses: In the first quarter, Omnicell’s selling, general, and administrative expenses escalated by 38.5%, whereas research and development expenses rose 55.7% year over year, respectively. These escalating expenses led to a 619 basis-point contraction in operating margin, exerting significant pressure on the company’s bottom line.
Macroeconomic Woes: Omnicell is currently experiencing the impact of inflationary hazards, primarily due to semiconductor and auto component costs and trade and steel and other raw material costs. The current geopolitical scenario continues to pose challenges as well.
Competitive Landscape: Omnicell faces intense competition across the medication management and supply chain solutions markets from renowned MedTech bigwigs. The increased competition could result in pricing pressure and a reduced margin, which would affect the company’s performance.
Estimate Trend
In the past 90 days, the Zacks Consensus Estimate for Omnicell’s 2022 earnings has moved north by 0.8% to $3.87.
The Zacks Consensus Estimate for 2022 revenues is pegged at $1.39 billion, suggesting a 23.2% rise from the year-ago reported number.
Key Picks
A few better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) .
AMN Healthcare has a long-term earnings growth rate of 1.1%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 15.6%, on average. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has outperformed its industry in the past year. AMN has gained 3.3% against the industry’s 64.4% fall.
Medpace has a historical growth rate of 27.3%. Medpace’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.1%. It currently has a Zacks Rank #2 (Buy).
Medpace has outperformed its industry in the past year. MEDP has declined 15.2% compared with the industry’s 64.4% fall.
UnitedHealth has an estimated long-term growth rate of 14.8%. UnitedHealth’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%. It currently carries a Zacks Rank #2.
UnitedHealth has outperformed the industry over the past year. UNH has gained 20.7% compared with 18% industry growth in the said period.
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Here's Why Investors Should Retain Omnicell (OMCL) Stock Now
Omnicell, Inc. (OMCL - Free Report) is gaining from robust performance across its operating segments. The company recorded better-than-expected results for the first quarter of 2022. The launch of the latest generation of IV compounding robot IVX to power Omnicell’s IV Compounding Service instills optimism. A strong solvency position is another upside. However, stiff competition and mounting operating expenses raise apprehension.
In the past year, the Zacks Rank #3 (Hold) stock has declined 20.1% compared with a 46.7% fall of the industry and a 2.9% drop of the S&P 500.
The renowned medical device solutions provider has a market capitalization of $4.81 billion. Its first-quarter 2022 earnings beat the Zacks Consensus Estimate by 16.9%.
In the past five years, the company registered earnings growth of 44.6%, ahead of the industry’s 16.3% rise and the S&P 500’s 13.4% increase. The long-term expected growth rate is estimated at 20% compared with the industry’s projection of 21.9% and the S&P 500’s projected 10.7% growth.
Image Source: Zacks Investment Research
Let’s delve deeper.
Factors At Play
Q1 Upsides: Omnicell exited the first quarter with earnings and revenues ahead of the Zacks Consensus Estimate. The top line was driven by strong revenue contributions from the company’s operating segments. The ongoing robust demand for Omnicell’s medication management solutions buoys optimism. The revenue contributions from the latest acquisitions of FDS Amplicare, ReCept and MarkeTouch Media also instill investors’ confidence. The company raised its adjusted EPS guidance for 2022, portraying consistent growth momentum.
Autonomous Pharmacy Model Holds Potential: Omnicell has an elaborate vision for the autonomous pharmacy. As a major milestone in this niche, the company introduced Omnicell One, which leverages cloud-based data and predictive prescriptive analytics to provide real-time visibility with actionable insights and workflow optimization recommendations. These insights and recommendations help improve clinical, financial and operational outcomes across the pharmacy supply chain. The Omnicell One was recently leveraged by the University Health in San Antonio and an Ohio-based health system partner.
In the first quarter, Omnicell launched the IVX Station, which offers a differentiated approach to allow IV compounding at scale while reducing errors related to manual processes and lowering the high cost of outsourcing.
Strong Solvency: Omnicell exited first-quarter 2022 with cash and cash equivalents of $265 million. The company did report any debt on its balance sheet at the end of the first quarter, indicating strong solvency. This is good news regarding the company’s solvency position, particularly during the year of economic downturn, when it is majorly facing manufacturing and supply disruptions globally.
Downsides
Rising Operating Expenses: In the first quarter, Omnicell’s selling, general, and administrative expenses escalated by 38.5%, whereas research and development expenses rose 55.7% year over year, respectively. These escalating expenses led to a 619 basis-point contraction in operating margin, exerting significant pressure on the company’s bottom line.
Macroeconomic Woes: Omnicell is currently experiencing the impact of inflationary hazards, primarily due to semiconductor and auto component costs and trade and steel and other raw material costs. The current geopolitical scenario continues to pose challenges as well.
Competitive Landscape: Omnicell faces intense competition across the medication management and supply chain solutions markets from renowned MedTech bigwigs. The increased competition could result in pricing pressure and a reduced margin, which would affect the company’s performance.
Estimate Trend
In the past 90 days, the Zacks Consensus Estimate for Omnicell’s 2022 earnings has moved north by 0.8% to $3.87.
The Zacks Consensus Estimate for 2022 revenues is pegged at $1.39 billion, suggesting a 23.2% rise from the year-ago reported number.
Key Picks
A few better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) .
AMN Healthcare has a long-term earnings growth rate of 1.1%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 15.6%, on average. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has outperformed its industry in the past year. AMN has gained 3.3% against the industry’s 64.4% fall.
Medpace has a historical growth rate of 27.3%. Medpace’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.1%. It currently has a Zacks Rank #2 (Buy).
Medpace has outperformed its industry in the past year. MEDP has declined 15.2% compared with the industry’s 64.4% fall.
UnitedHealth has an estimated long-term growth rate of 14.8%. UnitedHealth’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%. It currently carries a Zacks Rank #2.
UnitedHealth has outperformed the industry over the past year. UNH has gained 20.7% compared with 18% industry growth in the said period.