Omnicell’s OMCL fourth-quarter 2024 performance was driven by its long-term development strategy, such as innovative solutions, expansion into new markets, strategic partnerships and procurement of new technologies. OMCL’s progress toward its 2025 financial goals instills optimism. However, adverse macroeconomic challenges and fierce rival pressure could hurt Omnicell’s performance.
Currently carrying a Zacks Rank #3 (Hold), OMCL stock has delivered an impressive performance in the past year. Shares of the company have risen 47.1% against the industry's 7.9% decline. The S&P 500 composite has increased 18.5% in the said time frame.
The renowned healthcare technology company has a market capitalization of $1.84 billion. Omnicell’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 99.53%.
Tailwinds for OMCL Stock
Strategic Imperatives to Drive Growth: By offering differentiated, innovative solutions, expanding into new markets, developing strategic partnerships and acquiring new technologies, Omnicell is poised to support the evolving needs of healthcare institutions and create opportunities for long-term growth.
In line with this, the company’s XT Amplify, a multiyear innovation program, is gaining significant market acceptance. Early feedback on the program has been positive, significantly backing Omnicell’s efforts to deliver enhanced clinical and operational outcomes at the point-of-care market and within pharmacies.
Meanwhile, its Advanced Services offering, including Central Pharmacy Dispensing Services, IV Compounding Service (“IVCS”), EnlivenHealth and Specialty Pharmacy Services, is gaining recognition from health systems across the country. During the fourth quarter, Omnicell had several notable wins, including the renewal and expansion of services with a large academic medical center, a contract for a new specialty pharmacy program with a health system in the Northeast and a new collaboration to optimize specialty pharmacy program for health system in the Southeast.
2025 Roadmap Looks Impressive: In terms of its financial roadmap, Omnicell is targeting to reach $1.9-$2 billion in revenues by 2025, representing a CAGR of 14-15% in the 2021-2025 period. Additional targets include a non-GAAP gross margin of 52-53% and a non-GAAP EBITDA margin of approximately 23%. The company is well-positioned to deliver on the 2025 total revenue growth targets, driven by factors like improving tech services revenues, benefits from long-term sole source customer partnerships, multi-year co-development plans and increased average deal sizes.
Per the latest update, the company delivered a non-GAAP EBITDA of $46 million in the fourth quarter of 2024, well above its guidance of $14-$20 million. Additionally, non-GAAP earnings per share of 60 cents exceeded the pre-announced guidance of 10-20 cents due to robust revenue execution and strong cost and operating expense management.
Concerns for OMCL Stock
Macroeconomic Challenges: The broader U.S. and global economies are facing elevated inflationary pressures, continued supply-chain disruptions, labor shortages and geopolitical instability. Simultaneously, OMCL is navigating the ongoing healthcare system capital budget and labor constraints, which have continued to impact its Point-of-Care product line. The challenging environment for some of the health system customers has also led to a 25.1% year-over-year decrease in the company’s fourth-quarter product revenues.
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Competitive Landscape: Omnicell faces intense competition in the medication management and supply-chain solutions market. Even though it continues to gain market share from other medication management and supply-chain solution providers, major competitors still pose threats as they spearhead several expansion programs. This increased competition could result in pricing pressure and a reduced margin, negatively impacting the company’s performance.
OMCL Estimate Trend
The Zacks Consensus Estimate for 2025 earnings per share has remained constant at $1.78 in the past 30 days.
The Zacks Consensus Estimate for 2025 revenues is pegged at $1.13 billion, suggesting a 1.4% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Boston Scientific BSX and Cardinal Health CAH.
Phibro Animal Health has an estimated fiscal 2025 earnings growth rate of 62.1% compared with the industry’s 15.4%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.06%. Its shares have surged 68.2% compared with the industry’s 12.5% growth in the past year.
PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Boston Scientific, carrying a Zacks Rank #2 (Buy) at present, has an earnings yield of 2.7% compared with the industry’s 1.4%. Shares of the company have rallied 56.9% compared with the industry’s 12.5% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 10.7% compared with the industry’s 9.4%. Shares of the company have rallied 15.9% against the industry’s 4.1% decline. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%.
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