Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering OSI Systems (OSIS - Free Report) , which belongs to the Zacks Electronics - Miscellaneous Components industry.
This airport security and full-body scanner manufacturer has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 2.57%.
For the most recent quarter, OSI was expected to post earnings of $2.53 per share, but it reported $2.6 per share instead, representing a surprise of 2.77%. For the previous quarter, the consensus estimate was $2.52 per share, while it actually produced $2.58 per share, a surprise of 2.38%.
Price and EPS Surprise
For OSI, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
OSI currently has an Earnings ESP of +1.47%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner.
Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.
Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
OSI Systems (NASDAQ:OSIS – Get Free Report) and CPS Technologies (NASDAQ:CPSH – Get Free Report) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, earnings and analyst recommendations.
Earnings & Valuation This table compares OSI Systems and CPS Technologies”s revenue, earnings per share and valuation.
Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio OSI Systems $1.71 billion 2.02 $149.64 million $8.76 24.00 CPS Technologies $32.60 million 2.62 $420,000.00 N/A N/A OSI Systems has higher revenue and earnings than CPS Technologies.
Analyst Recommendations This is a breakdown of current recommendations and price targets for OSI Systems and CPS Technologies, as reported by MarketBeat.com.
Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score OSI Systems 0 1 6 0 2.86 CPS Technologies 1 1 1 0 2.00 OSI Systems presently has a consensus price target of $291.86, indicating a potential upside of 38.81%. CPS Technologies has a consensus price target of $6.00, indicating a potential upside of 26.85%. Given OSI Systems’ stronger consensus rating and higher probable upside, equities research analysts plainly believe OSI Systems is more favorable than CPS Technologies.
Risk & Volatility OSI Systems has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, CPS Technologies has a beta of 2.03, suggesting that its share price is 103% more volatile than the S&P 500.
Institutional & Insider Ownership 89.2% of OSI Systems shares are held by institutional investors. Comparatively, 11.2% of CPS Technologies shares are held by institutional investors. 4.3% of OSI Systems shares are held by insiders. Comparatively, 13.2% of CPS Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Profitability This table compares OSI Systems and CPS Technologies’ net margins, return on equity and return on assets.
Net Margins Return on Equity Return on Assets OSI Systems 8.42% 18.84% 7.13% CPS Technologies 0.10% 0.16% 0.13% Summary OSI Systems beats CPS Technologies on 9 of the 12 factors compared between the two stocks.
About OSI Systems (Get Free Report)
OSI Systems, Inc. designs and manufactures electronic systems and components. It operates in three segments: Security, Healthcare, and Optoelectronics and Manufacturing. The Security segment offers baggage and parcel inspection, cargo and vehicle inspection, hold baggage and people screening, radiation monitoring, explosive and narcotics trace detection systems, and optical inspection systems under the Rapiscan name. It also provides site design, installation, training, and technical support services; and turnkey security screening solutions under the S2 name. The Healthcare segment offers patient monitoring, cardiology and remote monitoring, and connected care systems and accessories under the Spacelabs name for use in critical care, emergency, and perioperative areas within hospitals, physicians' offices, medical clinics, and ambulatory surgery centers. The Optoelectronics and Manufacturing segment provides optoelectronic devices under the OSI Optoelectronics, OSI LaserDiode, OSI Laserscan, and Advanced Photonix names for the aerospace and defense, avionics, medical imaging and diagnostics, biochemistry analysis, pharmaceutical, nanotechnology, telecommunications, construction, and homeland security markets. It also offers electronics manufacturing services to original equipment manufacturers and end users for medical, automotive, defense, aerospace, industrial, and consumer applications under the OSI Electronics, APlus Products, Altaflex, and PFC Flexible Circuits names; LCD displays for medical, industrial, and consumer electronics applications; and flex circuits for OEM customers. This segment offers laser-based remote sensing devices to detect and classify vehicles in toll and traffic management systems under the OSI Laserscan and Autosense names; and solid-state laser products for aerospace, defense, telecommunication, and medical applications under the OSI LaserDiode name. The company was incorporated in 1987 and is headquartered in Hawthorne, California.
About CPS Technologies (Get Free Report)
CPS Technologies Corporation provides advanced material solutions to the transportation, automotive, energy, computing/internet, telecommunication, aerospace, defense, and oil and gas markets in the United States, Europe, and Asia. The company offers metal matrix composites such as baseplates for various applications, including motor controllers used in electric trains, subway cars, wind turbines, and hybrid and electric vehicles; hermetic packages for use in radar, satellite, and avionics applications; baseplates and housings used in modules built with wide band gap semiconductors; and lids and heat spreaders for use in internet switches and routers. It also assembles housings and packages that includes metal matrix composite components for hybrid circuits; and produces armor for naval and military applications. The company sells its products to microelectronics systems companies. The company was formerly known as Ceramics Process Systems Corporation and changed its name to CPS Technologies Corporation in March 2007. CPS Technologies Corporation was incorporated in 1984 and is based in Norton, Massachusetts.
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HAWTHORNE, Calif.--(BUSINESS WIRE)--OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ: OSIS) today announced that its Security division received an order for approximately $50 million from a North American customer to provide ongoing maintenance service for its installed base of Rapiscan® inspection systems that are utilized for screening baggage, cargo and vehicles. As part of the award, the Company is also expected to provide continued support for its CertScan® Platform.
OSI Systems’ President and CEO, Ajay Mehra, commented, "We are pleased to extend our long-standing support for this customer’s security operations. Our focus remains on delivering dependable service while enhancing performance and visibility across the installed base through CertScan."
About OSI Systems
OSI Systems designs and manufactures specialized electronic systems and components for critical applications. The Company operates through three business segments: Security, Optoelectronics and Manufacturing, and Healthcare. Its Security division delivers advanced inspection systems, turnkey screening solutions, and comprehensive support services to protect people and infrastructure. The Optoelectronics and Manufacturing segment serves as a global supplier of high-performance optoelectronic solutions and precision manufacturing services for leading OEMs. The Healthcare segment focuses on patient monitoring, diagnostic cardiology, and related services with the goal of enhancing clinical care and patient outcomes. Serving customers in over 170 countries, OSI Systems strategically positions its sales, service, R&D, and manufacturing capabilities worldwide to provide fast and efficient delivery and support. For more information on OSI Systems or any of its subsidiary companies, visit www.osi-systems.com. News Filter: OSIS-G
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to OSI Systems’ current expectations, beliefs, and projections concerning matters that are not historical facts. Forward-looking statements are not guarantees of future performance and involve uncertainties, risks, assumptions, and contingencies, many of which are outside OSI Systems’ control and which may cause actual results to differ materially from those described in or implied by any forward-looking statements. Undue reliance should not be placed on forward-looking statements, which are based on currently available information and speak only as of the date on which they are made. OSI Systems assumes no obligation to update any forward-looking statement made in this press release that becomes untrue because of subsequent events, new information, or otherwise, except to the extent it is required to do so in connection with its ongoing requirements under Federal securities laws. For a further discussion of factors that could cause OSI Systems’ future results to differ materially from any forward-looking statements, see the section entitled "Risk Factors" in OSI Systems’ most recently filed Annual Report on Form 10-K and other risks described therein and in documents subsequently filed by OSI Systems from time to time with the Securities and Exchange Commission.
Shares of OSI Systems, Inc. (NASDAQ:OSIS – Get Free Report) have earned an average recommendation of “Buy” from the seven analysts that are presently covering the company, MarketBeat reports. One equities research analyst has rated the stock with a hold recommendation, five have given a buy recommendation and one has assigned a strong buy recommendation to the company. The average 1 year target price among brokerages that have issued a report on the stock in the last year is $282.00.
A number of analysts recently commented on OSIS shares. Roth Mkm increased their price objective on OSI Systems from $292.00 to $295.00 and gave the company a “buy” rating in a research note on Friday, January 30th. Weiss Ratings raised OSI Systems from a “buy (b)” rating to a “buy (a-)” rating in a research note on Wednesday, March 11th. B. Riley Financial increased their price objective on OSI Systems from $300.00 to $320.00 and gave the company a “buy” rating in a research note on Friday, January 30th. Finally, JPMorgan Chase & Co. increased their price objective on OSI Systems from $255.00 to $262.00 and gave the company a “neutral” rating in a research note on Monday, February 2nd.
Read Our Latest Analysis on OSIS
Insider Activity at OSI Systems In related news, Director Deepak Chopra sold 20,000 shares of the stock in a transaction on Monday, February 2nd. The stock was sold at an average price of $250.91, for a total transaction of $5,018,200.00. Following the sale, the director owned 273,044 shares of the company’s stock, valued at $68,509,470.04. This trade represents a 6.82% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. 4.30% of the stock is currently owned by insiders.
Hedge Funds Weigh In On OSI Systems Large investors have recently added to or reduced their stakes in the business. Danske Bank A S purchased a new position in OSI Systems during the third quarter worth about $25,000. Private Trust Co. NA lifted its position in OSI Systems by 179.5% during the fourth quarter. Private Trust Co. NA now owns 123 shares of the technology company’s stock worth $31,000 after buying an additional 79 shares during the period. Mcguire Capital Advisors Inc. purchased a new position in OSI Systems during the fourth quarter worth about $32,000. Salomon & Ludwin LLC purchased a new position in OSI Systems during the third quarter worth about $32,000. Finally, Richardson Financial Services Inc. lifted its position in OSI Systems by 58.2% during the third quarter. Richardson Financial Services Inc. now owns 144 shares of the technology company’s stock worth $36,000 after buying an additional 53 shares during the period. 89.21% of the stock is currently owned by hedge funds and other institutional investors.
OSI Systems Stock Up 2.3% OSI Systems stock opened at $274.33 on Friday. The company has a debt-to-equity ratio of 1.18, a quick ratio of 2.31 and a current ratio of 3.15. The firm has a market capitalization of $4.52 billion, a price-to-earnings ratio of 31.07, a price-to-earnings-growth ratio of 2.19 and a beta of 1.34. OSI Systems has a fifty-two week low of $164.18 and a fifty-two week high of $306.12. The stock’s fifty day moving average is $274.69 and its two-hundred day moving average is $266.93.
OSI Systems (NASDAQ:OSIS – Get Free Report) last posted its earnings results on Thursday, January 29th. The technology company reported $2.58 earnings per share for the quarter, beating the consensus estimate of $2.52 by $0.06. The company had revenue of $464.06 million for the quarter, compared to analyst estimates of $449.51 million. OSI Systems had a return on equity of 18.58% and a net margin of 8.52%.OSI Systems’s revenue was up 10.5% compared to the same quarter last year. During the same quarter in the prior year, the company earned $2.42 earnings per share. Analysts predict that OSI Systems will post 9.22 EPS for the current fiscal year.
About OSI Systems (Get Free Report)
OSI Systems, Inc (NASDAQ: OSIS) is a publicly traded technology company founded in 1987 and headquartered in Hawthorne, California. The company designs, develops and manufactures advanced security and inspection systems, optoelectronic devices and medical imaging equipment. Over its history, OSI Systems has grown its product offerings through internal research and development as well as strategic acquisitions, expanding its capabilities in mission-critical sensing and inspection technologies.
OSI Systems operates three primary business segments.
See Also Five stocks we like better than OSI Systems
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Investors looking for stocks in the Electronics - Miscellaneous Components sector might want to consider either CTS (CTS) or OSI Systems (OSIS). But which of these two companies is the best option for those looking for undervalued stocks?
HAWTHORNE, Calif.--(BUSINESS WIRE)--OSI Systems, Inc. (Nasdaq: OSIS) will host its quarterly conference call on Monday, May 4, 2026, at 1:30 p.m. PT to discuss its financial results for the quarter ended March 31, 2026. The live webcast will be available in the Investor Relations section of the Company's website at www.osi-systems.com. A replay of the conference call will be available shortly afterward and can also be accessed in the Investor Relations section of the Company's website at www.os.
HAWTHORNE, Calif.--(BUSINESS WIRE)--OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ: OSIS) today announced that its Security division has been awarded an Undefinitized Contract Action (UCA) with a not-to-exceed value of approximately $235 million for the production and integration of a homeland defense over the horizon radar (OTHR) transmit subsystem. The system is designed to enable long‑range tracking of various target types beyond conventional line‑of‑sight limitations. OSI System.
The market expects OSI Systems (OSIS - Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on May 4, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus EstimateThis airport security and full-body scanner manufacturer is expected to post quarterly earnings of $2.53 per share in its upcoming report, which represents a year-over-year change of +3.7%.
Revenues are expected to be $451.45 million, up 1.6% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.2% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for OSI?For OSI, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -4.81%.
On the other hand, the stock currently carries a Zacks Rank of #4.
So, this combination makes it difficult to conclusively predict that OSI will beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that OSI would post earnings of $2.52 per share when it actually produced earnings of $2.58, delivering a surprise of +2.38%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
OSI doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Expected Results of an Industry PlayerUniversal Display Corp. (OLED - Free Report) , another stock in the Zacks Electronics - Miscellaneous Components industry, is expected to report earnings per share of $1.13 for the quarter ended March 2026. This estimate points to a year-over-year change of -16.3%. Revenues for the quarter are expected to be $155.62 million, down 6.4% from the year-ago quarter.
Over the last 30 days, the consensus EPS estimate for Universal Display has been revised 4.8% down to the current level. Nevertheless, the company now has an Earnings ESP of -7.76%, reflecting a lower Most Accurate Estimate.
This Earnings ESP, combined with its Zacks Rank #4 (Sell), makes it difficult to conclusively predict that Universal Display will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
HAWTHORNE, Calif.--(BUSINESS WIRE)--OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ: OSIS) today announced its financial results for the third quarter of fiscal 2026. Ajay Mehra, OSI Systems' President and Chief Executive Officer, stated, “Our third quarter results demonstrate the strength and durability of our diversified portfolio highlighted by record Q3 non‑GAAP earnings per share and strong bookings, reflecting sound execution in our Security and Optoelectronics and Manufacturin.
OSI Systems (OSIS - Free Report) came out with quarterly earnings of $2.6 per share, beating the Zacks Consensus Estimate of $2.53 per share. This compares to earnings of $2.44 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +2.70%. A quarter ago, it was expected that this airport security and full-body scanner manufacturer would post earnings of $2.52 per share when it actually produced earnings of $2.58, delivering a surprise of +2.38%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
OSI, which belongs to the Zacks Electronics - Miscellaneous Components industry, posted revenues of $453.25 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 0.40%. This compares to year-ago revenues of $444.35 million. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
OSI shares have added about 10.8% since the beginning of the year versus the S&P 500's gain of 5.6%.
What's Next for OSI?While OSI has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for OSI was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.94 on $544.19 million in revenues for the coming quarter and $10.46 on $1.84 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Miscellaneous Components is currently in the top 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Ouster, Inc. (OUST - Free Report) , another stock in the same industry, has yet to report results for the quarter ended March 2026. The results are expected to be released on May 5.
This company is expected to post quarterly loss of $0.31 per share in its upcoming report, which represents a year-over-year change of +26.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Ouster, Inc.'s revenues are expected to be $45.8 million, up 40.4% from the year-ago quarter.
OSI Systems (OSIS - Free Report) reported $453.25 million in revenue for the quarter ended March 2026, representing a year-over-year increase of 2%. EPS of $2.60 for the same period compares to $2.44 a year ago.
The reported revenue compares to the Zacks Consensus Estimate of $451.45 million, representing a surprise of +0.4%. The company delivered an EPS surprise of +2.7%, with the consensus EPS estimate being $2.53.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how OSI performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Revenues- Healthcare division: $40.7 million versus the three-analyst average estimate of $41.91 million. The reported number represents a year-over-year change of -6.9%.Revenues- Intersegment eliminations: $-17.72 million versus $-17 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +17.1% change.Revenues- Optoelectronics and Manufacturing division, including intersegment revenues: $111 million versus the three-analyst average estimate of $110.29 million. The reported number represents a year-over-year change of +10.1%.Revenues- Security division: $319.26 million versus the three-analyst average estimate of $317.02 million. The reported number represents a year-over-year change of +1.4%.Non-GAAP basis Operating Income (loss)- Security Division: $58.29 million versus the two-analyst average estimate of $56.33 million.Non-GAAP basis Operating Income (loss)- Corporate/Elimination: $-10.91 million compared to the $-10.35 million average estimate based on two analysts.Non-GAAP basis Operating Income (loss)- Healthcare Division: $0.54 million versus $1.7 million estimated by two analysts on average.Non-GAAP basis Operating Income (loss)- Optoelectronics and Manufacturing Division: $14.96 million versus $14.85 million estimated by two analysts on average.View all Key Company Metrics for OSI here>>>
Shares of OSI have returned +5.4% over the past month versus the Zacks S&P 500 composite's +10% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.
HAWTHORNE, Calif.--(BUSINESS WIRE)--OSI Systems, Inc. (NASDAQ: OSIS) today announced that management will participate in the BofA Securities 33rd Annual Industrials, Transportation & Airlines Key Leaders Conference on Thursday, May 14, 2026, in New York, NY. The presentation is scheduled for 10:20 a.m. EDT. A live webcast of the presentation will be available in the Investor Relations section of the Company's website at www.osi-systems.com. A replay will be accessible following the event. A.
HAWTHORNE, Calif.--(BUSINESS WIRE)--OSI Systems, Inc. (NASDAQ: OSIS) today announced that its Security division received a task order for approximately $15 million from a U.S. government customer. OSI Systems is expected to provide its cargo and vehicle inspection systems. The scope of work is also expected to include follow‑on service and support. OSI Systems' President and CEO, Ajay Mehra, commented, “This award underscores continued confidence in our inspection solutions and our ability to e.
HAWTHORNE, Calif.--(BUSINESS WIRE)--OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ: OSIS) today announced that its Security division has received an order valued at approximately $19 million in North America to support the deployment of the Company's non-intrusive inspection (NII) systems at cargo and vehicle inspection checkpoints, including civil works and systems integration. OSI Systems' President and CEO, Ajay Mehra, commented, “This award reflects our continued partnership wit.
HAWTHORNE, Calif.--(BUSINESS WIRE)--OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ: OSIS) today announced that its Optoelectronics and Manufacturing division (“Opto”) has received an order valued at approximately $10 million to supply optical sub-assemblies to a leading OEM in the semiconductor equipment industry. OSI Systems' President and Chief Executive Officer, Ajay Mehra, commented, “We are pleased to secure this award, which reflects our expertise in delivering high-reliabilit.
It has been about a month since the last earnings report for OSI Systems (OSIS - Free Report) . Shares have lost about 9.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is OSI due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
OSIS Q3 Earnings Beat on Record Backlog and Strong BookingsOSI Systems posted third-quarter fiscal 2026 earnings that topped expectations on steady execution in its two largest divisions. Adjusted earnings were $2.60 per share, up 6.6% year over year and 2.8% above the Zacks Consensus Estimate of $2.53.
Revenues were $453 million, up 2% from the year-ago quarter and 0.4% ahead of the consensus mark of $451 million. Backlog ended the quarter at a record $1.9 billion, underscoring demand visibility across the portfolio.
OSIS Lands Major Defense Work and International AwardsManagement pointed to strong bookings momentum during the quarter, supported by awards in both Security and Optoelectronics and Manufacturing. A key highlight was a homeland defense Undefinitized Contract Action with a not-to-exceed value of about $235 million tied to an over-the-horizon radar transmit subsystem.
The company also cited several international wins for cargo and vehicle inspection systems and airport screening solutions. While some Middle East activity was delayed by logistics and travel constraints, management framed the impact as timing-related and noted demand could strengthen once conditions stabilize.
OSI Systems Sees Security Growth Beyond Mexico ProgramsSecurity revenues were $319.3 million, as higher service revenues, stronger aviation product sales and increased RF contributions offset a sharp step-down in Mexico contract revenues. Mexico’s Security revenues fell to $11 million from $69 million in the prior-year period, creating the toughest comparison in fiscal 2026.
Excluding the Mexico contracts in both periods, Security revenues increased 25% year over year, reflecting strength across services, aviation and RF-engineered solutions. U.S. order activity was affected by a Department of Homeland Security shutdown that delayed procurement, with management expecting ordering patterns to normalize after the shutdown ended.
OSIS Optoelectronics Momentum Adds Balance to ResultsOptoelectronics and Manufacturing revenues were $111.0 million, up 10% year over year and a quarterly record for the division, according to management. The segment’s book-to-bill ratio exceeded 1, supporting visibility as customers diversify supply chains and launch new products.
A notable win included a $40 million award for electronic subassemblies from a medical OEM. Management emphasized its vertically integrated model and broad manufacturing footprint as an advantage across aerospace, defense, medical and industrial end markets.
OSI Systems Works Through Healthcare Timing HeadwindsHealthcare revenues were $40.7 million, and management said the division was hurt by order timing, most notably in the United States. The company noted EMEA posted growth during the quarter and reiterated that Healthcare products generally carry the highest contribution margins within OSI’s portfolio.
Given the lower sales level, the adjusted operating margin in Healthcare was described as negligible, with management expecting a recovery as performance improves. The division remains focused on operational progress and new product development.
OSIS Margins Shift With Mix and Investment PrioritiesConsolidated gross margin was 33% in the quarter, slightly below the prior-year level, as a less favorable product mix outweighed benefits from higher service revenues. SG&A declined year over year, while R&D increased as the company invested in innovation.
Security’s adjusted operating margin expanded to 18.3% from 18.1% a year ago, helped by higher-margin service revenues and reduced operating expenses. Optoelectronics and Manufacturing adjusted operating margin dipped to 13.5% from 14.0% on a less favorable mix.
OSI Systems Cash Collection After Quarter-End Supports LiquidityOperating cash flow was $14.5 million, pressured by limited collections on Mexico receivables. Shortly after quarter-end, the company collected about $74 million related to its largest Mexico receivable, supporting early fourth-quarter cash flow.
OSI ended the quarter with $345.2 million in cash, and management expects substantial inflows in the fourth quarter and into fiscal 2027 as Mexico receivables continue to be collected. Net leverage at quarter end was about 2.2x under its credit agreement.
OSIS Maintains Fiscal 2026 OutlookThe company reiterated fiscal 2026 guidance for revenues of $1.825 billion to $1.867 billion and adjusted earnings of $10.30 to $10.55 per share. Management said near-term bookings and fourth-quarter revenues could be affected by government procurement timing and conflicts in the Middle East.
OSI also noted its adjusted earnings guidance excludes potential impairment, restructuring and other costs, along with certain non-recurring tax items. Management pointed to its diversified end markets and growing service mix as support for execution.
How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates review.
VGM ScoresAt this time, OSI has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, OSI has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerOSI is part of the Zacks Electronics - Miscellaneous Components industry. Over the past month, TE Connectivity (TEL - Free Report) , a stock from the same industry, has gained 3.8%. The company reported its results for the quarter ended March 2026 more than a month ago.
TE Connectivity reported revenues of $4.74 billion in the last reported quarter, representing a year-over-year change of +14.5%. EPS of $2.73 for the same period compares with $2.10 a year ago.
TE Connectivity is expected to post earnings of $2.81 per share for the current quarter, representing a year-over-year change of +23.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
TE Connectivity has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
Key Takeaways OSIS posted a record $1.9B backlog in fiscal Q3 2026, boosting visibility heading into 2027.Mexico revenue slid to $11M from $69M, yet ex-Mexico Security revenue jumped 25% y/y in Q3.RF revenue was $38M and a $235M radar contract action hit backlog as services rose to $108M. OSI Systems (OSIS - Free Report) is exiting a noisy transition period with stronger visibility than the headline revenue trend suggests. A record backlog, improving mix in Security, and a growing RF-engineered solutions platform are reshaping the setup for fiscal 2027.
At the same time, quarterly comparisons are being distorted by the wind-down of a large Mexico program and by timing dynamics tied to government procurement and project delivery. The key for investors is separating temporary headwinds from the underlying demand picture.
OSIS Benefits From Record Backlog Entering Fiscal 2027OSI Systems ended fiscal Q3 2026 with a record backlog of about $1.9 billion, reinforcing revenue visibility as the company moves toward fiscal 2027. That backlog matters because it anchors near-term execution expectations across a portfolio that mixes large equipment programs with services, software, and multi-year integration work.
The backlog also provides a buffer while certain end markets see uneven timing. In fiscal Q3 2026, OSI Systems cited steady execution in its two largest divisions and strong bookings momentum, helping support confidence in the remaining fiscal 2026 outlook.
OSIS management reiterated fiscal 2026 revenue guidance of $1.825 billion to $1.867 billion and adjusted earnings guidance of $10.30 to $10.55 per share. The Zacks Consensus Estimate for revenues is currently pegged at $1.83 billion indicating 6.8% growth from fiscal 2025. The consensus mark for earnings is currently pegged at $10.40 per share, down 6 cents over the past 30 days, suggesting 11.1% growth fiscal 2025.
OSI Systems Works Through the Mexico TransitionThe Mexico program continues to drive the toughest year-over-year comparisons. Mexico program revenue stepped down to $11 million in fiscal Q3 2026 from $69 million a year ago, creating a sharp headwind inside the Security segment’s reported growth rate.
Management expects that headwind to be reduced in fiscal Q4 2026 and to largely roll off as fiscal 2027 begins. For investors, the main watch item is the cadence of quarterly comparisons as Mexico fades from the base, because that shift can make reported growth appear to “snap back” even if underlying demand is simply steady.
Outside Mexico, Security is showing renewed momentum. Excluding Mexico contracts in both periods, Security revenue rose 25% year over year in fiscal Q3 2026. The quarter’s drivers were aviation products, services, and RF-engineered solutions, highlighting that demand is broadening beyond a single program and that growth is not solely dependent on large turnkey awards.
OSI Systems Services Mix Builds Margin SupportAs the installed base expands, OSI Systems continues to convert deployments into recurring support revenue. Services revenue increased to $108 million in fiscal Q3 2026 from $103 million a year ago, and services were up year to date through March 2026 versus the prior-year period.
Management described services growth as potentially variable by quarter, even with support from installations and an expanding installed base. That variability is important because it can change the quarterly profit profile, but the strategic direction is clear: a larger recurring revenue layer can reduce reliance on large equipment cycles over time.
OSIS RF-Engineered Solutions Adds Multi-Year OptionalityRF-engineered solutions is emerging as a second growth vector inside Security. RF revenue was about $38 million in fiscal Q3 2026, and management said the run rate has increased materially since the acquisition.
The bigger catalyst is the homeland defense Undefinitized Contract Action with a not-to-exceed value of about $235 million for an over-the-horizon radar transmit subsystem, which entered backlog near the end of March. If execution tracks as expected, this type of multi-year work can add durability to Security’s growth profile, with potential service and integration attach over time.
OSI Systems Balances Investment and Cost DisciplineOperating signals in fiscal Q3 2026 showed disciplined spending alongside continued platform investment. Security adjusted operating margin improved to 18.3% from 18.1% a year ago, supported by higher-margin service revenue and lower operating expenses that helped offset Mexico mix effects.
Consolidated gross margin was 33%, slightly below the prior-year level due to product mix, even with the benefit of higher service contribution.
Selling, general & administrative declined to $71.5 million and represented 15.8% of sales, while research and development expense increased to $19.5 million as OSIS invested in Security and other initiatives.
Headwinds That Can Distort OSIS’ Quarterly ResultsSeveral factors can skew quarterly results even when longer-cycle demand remains intact. Backlog conversion can vary with project delivery timing, and government procurement patterns can shift order activity from quarter to quarter.
OSIS management also cited impacts tied to a Department of Homeland Security shutdown that delayed U.S. order activity in fiscal Q3 2026. In addition, Middle East-related program delays tied to logistics constraints and travel restrictions can affect the timing of order intake and project completion. Healthcare remains sensitive to order timing as well, which can pressure consolidated profitability when volumes dip.
Key Takeaways OSI Systems ended fiscal Q3 2026 with $1.9B backlog and a 1.3x book-to-bill ratio.OSIS says Itemiser 4DX and new Itemiser 5X won ECAC/EU G1 certification for European aviation screening.OSIS booked a $235M radar action plus new $15M Security and $40M manufacturing awards. OSI Systems (OSIS - Free Report) is riding a security modernization cycle that spans aviation, border protection, and critical infrastructure. The company is working through a Mexico program transition while leaning on record backlog and expanding demand outside that contract base.
At the same time, OSIS is pushing deeper into services, software, and RF-engineered solutions. The mix shift supports steadier revenue streams, but timing-driven variability remains part of the near-term setup.
OSIS Demand Is Tied to Security Modernization CyclesSecurity spending tied to border protection, aviation, and critical infrastructure continues to support order flow for OSIS. The company ended fiscal third-quarter 2026 with backlog of about $1.9 billion, and book-to-bill was 1.3x in the quarter.
Outside Mexico, the Security segment showed the underlying pace of demand. Excluding Mexico contracts in both periods, Security revenues increased 25% year over year in fiscal third-quarter 2026, reflecting contributions from services, aviation products, and RF-engineered solutions.
For investors, that mix matters because it suggests the Security segment can keep moving even as program-specific revenue streams reset. OSI Systems reiterated fiscal 2026 guidance for revenues of $1.825 billion to $1.867 billion and adjusted earnings of $10.30 to $10.55 per share.
The Zacks Consensus Estimate for revenues is currently pegged at $1.83 billion indicating 6.8% growth from fiscal 2025. The consensus mark for earnings is currently pegged at $10.40 per share, down 6 cents over the past 30 days, suggesting 11.1% growth fiscal 2025.
OSI Systems Aviation Certifications Can Expand AdoptionAviation security standards can act as a gatekeeper for deployments, especially in Europe. OSIS disclosed that its Itemiser 4DX and newly launched Itemiser 5X trace detection systems received ECAC/EU G1 certification, meeting European aviation security requirements for airport screening systems.
The company noted these systems are already widely deployed globally across passenger and cargo screening. It also highlighted use cases beyond airports, including customs, border security, prisons, and critical infrastructure applications.
That combination can support deployment momentum because certifications expand the addressable base for buyers that require compliance while reinforcing OSIS’s position in both aviation and adjacent screening categories.
OSIS Turns Installed Base Into Recurring Revenue StreamsOSIS continues to convert its installed base into services and software revenue that is less dependent on large equipment cycles. In fiscal third-quarter 2026, services revenues increased to $108 million from $103 million, and services were up year to date through March 2026 versus the prior-year period.
Management characterized services growth as potentially variable by quarter, but supported by the pace of installations and the expanding installed base. OSIS also pointed to a five-year Customs and Border Protection Screening Infrastructure Program award that adds multi-year integration work and a CertScan software-as-a-service element that can expand recurring revenue over time.
In this context, attach rates and the size of the installed base become key drivers. Continued research and development investment is aimed at extending platform capabilities and improving service and software attachment, helping build a recurring mix that can cushion equipment-cycle swings.
OSI Systems RF Capabilities Align With New Defense NeedsThe RF-engineered solutions business is scaling, widening OSIS’s exposure beyond traditional inspection programs. Bookings included a homeland defense Undefinitized Contract Action with a not-to-exceed value of about $235 million for an over-the-horizon radar transmit subsystem, which entered backlog near the end of March.
The contract includes initial funding of $46 million, with additional funding anticipated as the program progresses. OSIS framed the work as supporting long-range tracking beyond conventional line-of-sight limitations and emphasized its positioning in RF engineering, advanced manufacturing, and defense-system integration.
OSIS management also highlighted participation in the SHIELD Indefinite Delivery Indefinite Quantity vehicle and positioned these capabilities as relevant to the Golden Dome missile defense initiative. The pacing, however, remains dependent on government processes, which can affect timing of revenue recognition even when the opportunity is multi-year in nature.
OSIS Recent Awards Show Momentum Across SegmentsRecent awards underscore breadth across OSIS’ portfolio. The Security division secured a task order worth approximately $15 million from a U.S. government customer for cargo and vehicle inspection systems, and the scope includes follow-on service and support.
Optoelectronics and Manufacturing also added a multi-year award valued at more than $40 million from a medical device original equipment manufacturer for electronic sub-assemblies used in the customer’s platforms. OSIS highlighted its vertically integrated manufacturing model and global footprint as a differentiator in supporting high-reliability programs.
Key Takeaways OSIS posted $1.9B backlog and 1.3x book-to-bill in Q3 FY26, boosting visibility.OSIS collected $74M after quarter end and expects more in Q4 FY26 and FY2027, lifting cash flow.OSIS gross margin was 33% in Q3 FY26; mix, logistics and tariffs can swing results. OSI Systems (OSIS - Free Report) sits at an interesting crossroads. The company is working through a Mexico program transition, yet demand indicators remain strong and management expects cash collection to improve as receivables convert into cash. At the same time, results can swing quarter to quarter based on procurement cycles, logistics constraints and product mix. That mix of visibility and variability is central to the near-term decision.
On a year-to-date (YTD) basis, OSI Systems shares have dropped 16.3% underperforming peers, including L3Harris Technologies (LHX - Free Report) and Teledyne Technologies (TDY - Free Report) but outperforming Leidos Holdings (LDOS - Free Report) . YTD, shares of L3Harris and Teledyne have returned 3.4% and 21%, respectively, while Leidos fell 31.1%.
OSIS Stock’s Price Performance
Image Source: Zacks Investment Research
OSI Systems Backlog and Bookings Support VisibilityDemand support is hard to ignore. OSI Systems ended fiscal third-quarter 2026 with backlog of about $1.9 billion and posted a book-to-bill ratio of 1.3 times, signaling orders outpaced revenue in the period. That backlog provides a stronger visibility cushion as the Mexico Security program revenue steps down. Even with a record backlog, timing still matters because procurement decisions, project schedules and logistics can move revenue and margin recognition between quarters.
Excluding Mexico contracts in both periods, Security revenues increased 25% year over year in fiscal third-quarter 2026, supported by services, aviation products and RF-engineered solutions. Services are an important building block because they can be less dependent on large equipment cycles. In fiscal third-quarter 2026, services revenue rose to $108 million from $103 million, and year-to-date services were higher through March 2026 versus the prior-year period.
RF-engineered solutions add a longer runway. RF revenue was about $38 million in fiscal third-quarter 2026, and bookings included a homeland defense Undefinitized Contract Action with a not-to-exceed value of about $235 million for an over-the-horizon radar transmit subsystem, adding multi-year visibility.
OSIS Cash Collection Is a Potential CatalystCash collection is one of the most practical swing factors in the story. Operating cash flow was about $14 million in fiscal third-quarter 2026, a figure shaped by limited collections tied to Mexico receivables during the quarter.
Shortly after quarter end, OSI Systems collected about $74 million on its largest Mexico receivable. Management expects additional collections in fiscal fourth-quarter 2026 and into fiscal 2027, which could lift cash generation as working capital normalizes.
OSI Systems Balance Sheet Flexibility MattersThe balance sheet provides room to maneuver if cash collections continue to come through. OSIS had $345 million in cash as of March 31, 2026, and net leverage of about 2.2x under its credit agreement.
That flexibility matters because incremental cash inflows can be deployed in several directions. Management has linked the setup to potential debt reduction, selective acquisitions, and funding elevated Security research and development as it works to extend platform capabilities and improve service and software attach rates.
Risks That Can Break OSIS Near-Term ProspectsHowever, the downside case is not abstract. Consolidated gross margin was 33% in fiscal third-quarter 2026, slightly below the prior year, as product and service mix shifts can pressure margins even when services contribute more. OSIS management has also cautioned that margins can fluctuate with mix, volume, supply chain costs, foreign exchange and tariffs, which can translate into quarterly earnings variability.
Timing risk is another pressure point. The company cited a Department of Homeland Security shutdown as a factor that delayed U.S. order activity in fiscal third-quarter 2026, and it flagged Middle East-related logistics constraints and travel restrictions as potential drivers of program delays.
Healthcare adds an additional variable. Fiscal third-quarter 2026 Healthcare revenue declined to $40.7 million from $43.7 million a year ago, and segment non-GAAP operating margin fell to 1.3% from 5.1%, reflecting sensitivity to order timing and the impact of volume swings on profitability.
The company reiterated fiscal 2026 guidance for revenues of $1.825 billion to $1.867 billion and adjusted earnings of $10.30 to $10.55 per share. Management said near-term bookings and fourth-quarter revenues could be affected by government procurement timing and conflicts in the Middle East.
OSIS Shares are OvervaluedMeanwhile, a Value Score of C suggests OSIS shares are overvalued currently. OSI Systems is trading at about 1.83x forward 12-month sales lower than Leidos’ 0.85X.
Valuation: OSIS vs. LDOS
Image Source: Zacks Investment Research
However, OSI Systems shares are trading higher than L3Harris’ 2.33X and Teledyne’s 4.36X.
Valuation: OSIS vs. LHX
Image Source: Zacks Investment Research
Valuation: OSIS vs. TDY
Image Source: Zacks Investment Research
ConclusionOSI Systems’ prospects depends on the possibility of backlog converting into revenues smoothly over the next few quarters, rather than arriving in lumpy bursts. It is also worth watching whether services growth stays consistent, and whether RF program funding and milestones progress in a steady cadence, given the multi-year nature of recent defense work. Moreover, a stretched valuation is a concern for investors.
OSI Systems currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
HAWTHORNE, Calif.--(BUSINESS WIRE)--OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ: OSIS) today announced that its Security division has received an order valued at approximately $10 million in North America to support the deployment of cargo Non-Intrusive Inspection (NII) systems, including installation, training and lifecycle support. OSI Systems' President and CEO, Ajay Mehra, commented, “This order reflects the growing momentum we are seeing in the marketplace for expanding secu.
HAWTHORNE, Calif.--(BUSINESS WIRE)--OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ: OSIS) today announced that its Optoelectronics and Manufacturing division has received an order valued at approximately $12 million to supply electronic sub-assemblies to a leading OEM in the secure communications industry. OSI Systems' President and Chief Executive Officer, Ajay Mehra, commented, “We're pleased to expand this relationship with our customer. Our focus remains on delivering high-quali.
