On Dec 7, we issued an updated research report on Mountain View, CA-based Omnicell Inc. (OMCL - Free Report) . The stock has a Zacks Rank #5 (Strong Sell).
Over the last three months, Omnicell’s shares have been slightly above the broader industry. The stock has gained 0.2% versus the broader industry’s gain of 0.1%.
Omnicell exited third-quarter 2017 on a mixed note with earnings beating the Zacks Consensus Estimate and revenues missing the same. Also, a weak gross margin scenario is a matter of concern. We believe the company’s strategies including portfolio expansion, acquisitions and penetration into the medication adherence market to continue driving expenses. Meanwhile, costs related to the recently launched XT series have been exerting pressure on the bottom line.
Omnicell’s lowering of the upper end of the 2017 adjusted revenue guidance is reflective of the fact that the overall slump will stay to bother. A tough competitive landscape also acts as a dampener.
On a positive note, the year-over-year increase in earnings and revenues was impressive. The company witnessed balanced growth across all business lines in the quarter. We are also encouraged the company’s efforts on product innovation through Research and Development (R&D). Omnicell has of late been observed to gain consistently from a series of product launches (the latest being XT Series Automated Supply Dispensing system) and strategic partnerships.
Stocks to Consider
Some better-ranked medical stocks are PetMed Express, Inc. (PETS - Free Report) , Myriad Genetics, Inc. (MYGN - Free Report) and Align Technology, Inc. (ALGN - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 89.2% over a year.
Myriad Genetics has a long-term expected earnings growth rate of 15%. The stock has gained 94.9% in a year.
Align Technologyhas a long-term expected earnings growth rate of 28.9%. The stock has gained 142% in a year.
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