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OSI Systems Wins $11M Healthcare Order: Time to Buy the Stock?

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OSI Systems (OSIS - Free Report) secured an $11-million order for its Optoelectronics and Manufacturing division.

The contract involves supplying critical electronic sub-assemblies to a prominent healthcare original equipment manufacturer known for its advanced and specialized medical solutions.

Will the Momentum in OSIS Stock Continue?

OSIS shares have gained 23.4% year to date, outperforming the broader Zacks Electronics - Miscellaneous Components industry and its peers like Allient (ALNT - Free Report) , Kyocera (KYOCY - Free Report) and Ouster (OUST - Free Report) .

Over the same time frame, Ouster shares have risen 15.7%, while Allient and Kyocera shares have fallen 17.7% and 35.8%, respectively.

OSI Systems, Inc. Price and Consensus

 

OSI Systems, Inc. Price and Consensus

OSI Systems, Inc. price-consensus-chart | OSI Systems, Inc. Quote

OSIS’s outperformance can be primarily attributed to record revenue growth, supported by higher product and service revenues across its Security, Healthcare and Optoelectronics segments. A substantial backlog of $1.8 billion reflects healthy future demand for its offerings.

The company reported revenues of $344 million in the first quarter of fiscal 2025, representing a 23% year-over-year increase. This growth was accompanied by a 34% rise in operating income.

OSI Systems’ Security division highlights strong growth, driven by a significant increase in demand for products and services. In the first quarter of fiscal 2025, the division's revenues rose 36% from the previous year, reflecting this heightened demand.

Optoelectronics and Manufacturing divisions delivered solid quarterly results. The divisions continue to benefit from the company's broad global manufacturing footprint and exposure to various end markets.

OSIS’ Prospects Ride on Continuous Contract Wins

OSIS has made progress on the $500-million contract with Mexico's defense agency, SEDENA, to improve port and border security. Additionally, the company obtained a $200-million major international project.

Through its Rapiscan Systems division, OSI was awarded a key contract to provide turnkey cargo screening services in Uruguay. The project includes installing, operating, and maintaining advanced cargo screening systems at critical border points to enhance security and customs efficiency.

OSI Systems secured a $17-million international order for Eagle P60 high-energy drive-through cargo and vehicle inspection systems, along with T60 trailer-mounted vehicle inspection systems.

The company received a $10-million order for Z Backscatter Van mobile inspection systems, which includes comprehensive training, service and support.

Zacks Rank

OSI Systems currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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