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OMCL

Omnicell NasdaqGS:OMCL Stock Report

Last Price

US$109.84

Market Cap

US$4.9b

7D

0.7%

1Y

-27.3%

Updated

12 Aug, 2022

Data

Company Financials +
OMCL fundamental analysis
Snowflake Score
Valuation3/6
Future Growth4/6
Past Performance1/6
Financial Health4/6
Dividends0/6

OMCL Stock Overview

Omnicell, Inc., together with its subsidiaries, provides medication management solutions and adherence tools for healthcare systems and pharmacies the United States and internationally.

Omnicell, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Omnicell
Historical stock prices
Current Share PriceUS$109.84
52 Week HighUS$187.29
52 Week LowUS$103.62
Beta1.04
1 Month Change-0.56%
3 Month Change-1.29%
1 Year Change-27.35%
3 Year Change55.80%
5 Year Change121.68%
Change since IPO1,055.00%

Recent News & Updates

Aug 04

Omnicell reports Q2 earnings miss; reaffirms FY22 guidance and issues Q3 outlook

Omnicell press release (NASDAQ:OMCL): Q2 Non-GAAP EPS of $0.84 misses by $0.01. Revenue of $331M (+21.4% Y/Y) misses by $8.45M. Non-GAAP EBITDA for the second quarter of 2022 was $56M. This compares to non-GAAP EBITDA of $61M for the second quarter of 2021. For the full year 2022, the Company expects product bookings to be between $1.370 billion and $1.430 billion. The company expects full year 2022 total GAAP and non-GAAP revenues to be between $1.385 billion and $1.410 billion vs. consensus of $1.40B. Omnicell now expects full year 2022 GAAP and non-GAAP product revenues to be between $980 million and $995 million, and full year 2022 GAAP and non-GAAP service revenues to be between $405 million and $415 million. The Company continues to expect full year 2022 non-GAAP EBITDA to be between $243 million and $255 million. The Company expects full year 2022 non-GAAP earnings to be between $3.85 and $4.05 per share vs. consensus of $3.90. For the third quarter of 2022, the company expects total GAAP and non-GAAP revenues to be between $360 million and $366 million vs. consensus of $359.16M. The Company expects third quarter 2022 GAAP and non-GAAP product revenues to be between $261 million and $264 million, and third quarter 2022 GAAP and non-GAAP service revenues to be between $99 million and $102 million. The Company expects third quarter 2022 non-GAAP EBITDA to be between $60 million and $64 million. The Company expects third quarter 2022 non-GAAP earnings to be between $0.93 and $1.00 per share vs. consensus of $1.09.

Aug 03
Are Investors Undervaluing Omnicell, Inc. (NASDAQ:OMCL) By 41%?

Are Investors Undervaluing Omnicell, Inc. (NASDAQ:OMCL) By 41%?

In this article we are going to estimate the intrinsic value of Omnicell, Inc. ( NASDAQ:OMCL ) by estimating the...

Jul 21

Omnicell Fails To Justify Inclusion In Long-Only, Equity-Focused Portfolio

Omnicell has incurred ~25% downside on the charts this past year as investors priced in more systematic risks. We examine OMCL's inclusion into an equity-focused portfolio with a long-only mandate and no turnover restrictions. Here we demonstrate OMCL fails the litmus test to justify its inclusion right now. We price the stock at $121 on a blend of valuation inputs. Investment Summary From the Portfolio Manager's Desk Constructing equity-focused and cross-asset portfolios has become increasingly difficult in FY22. Therefore, in order to examine Omnicell, Inc.'s (OMCL) suitability into an equity-focused, long-only portfolio, we first have to understand what themes are positioned to outperform looking ahead. OMCL 6-month price action Data: Updata Equity strategies have been hammered this year, especially those held to long-only mandates. Moreover, the high beta trade that fuelled FY20–21's parabolic growth in US equities has shown a complete reversal, leading to strengths in alternative premia, as seen in Exhibit 1. Alas, retail liquidity has dried up across the market and growth has de-rated to the downside. As a result of this structural rotation, low-beta, high-quality strategies have agreed with investors this year. This trend looks set to continue. The valuation spread these factors have traditionally enjoyed is present again, as investors have priced in more systematic risks over idiosyncratic risk. This creates a strong case for cash-compounding names to re-rate to the upside. Moreover, as retail liquidity has been swept up in many corners of the market, there is now plenty of safety margin left for allocators to work with, especially in defensible sectors such as medical technology ("medtech"). Exhibit 1. Alternative premia has lent investors uncorrelated alpha in both tactical and strategic positioning Trend looks set to continue as investors look to step up in quality and increasingly position to hedge recession Data: Updata Alas, we advocate investors to step up in quality and resiliency in portfolio construction from H2 FY22. Noteworthy is that balanced portfolios – especially those with meaningful exposure to alternatives – have obtained strategic and tactical real risk-adjusted alpha, and are primed to continue doing so. Seeking alternatives-like exposure and reducing beta is integral to reducing equity risk and preventing further equity drawdown, we estimate. What's supporting this view? Firstly, investors are adding duration back into portfolios. The long-end of the UST curve has caught a bid in June/July as investors increasingly price in prospects of short-term recession. This is good for US medtech equities, we estimate. We've seen evidence of this in H2 already, as seen in Exhibit 2. Only the most resilient business models will survive a slowdown in GDP. In this vein, investors are turning to bottom-line fundamentals over top-line growth. Exhibit 2. Investors are adding duration back to portfolios to compensate for short-term slowdown Covariance of US medtech suggests the long-term outlook for the sector is optimistic Data: Updata Moreover, the macro-divergence in the DXY/SPX relationship has shown signs of narrowing, as seen in Exhibit 3. If recent correlations hold, then we could see further recovery in equities amid a potential shift in risk appetite. This would serve as a solid bedrock for quality factors to shine through in our estimation. Therefore, we are on the hunt for characteristics of quality – profitability, return on capital, market data, earnings momentum, FCF, market support, just to name a few. Exhibit 3. Reversal of macro-divergence at DXY/SPX level This could signal shift in risk budgeting towards equities if recent correlations hold Data: Updata Hence, in order to gauge OMCL's inclusion, we've taken a hard data approach and put it through a series of litmus tests. We have to examine its affinity to market, fundamental, valuation, technical and portfolio statistical factors to make the most informed investment reasoning possible. Here we demonstrate OMCL fails to justify its inclusion in the culmination of these factors. Rate neutral PT $121. Market factors Long duration equities have sold off en masse in FY22 amid a wind down in the growth trade. With that, investors have positioned away from exposure to equity beta. This mirrors the alternative premia we spoke of earlier. We are seeking to replicate alternatives like weighting across all portfolios and believe investors will continue paying a premium for these characteristics beyond H2 FY22. OMCL is largely agnostic to these characteristics. The stock has pushed lower since January–date along with a simultaneous jump in equity beta, as seen in Exhibit 4. This, whilst weakening in price performance relative to the benchmark up until this day. Meanwhile, its covariance structure has shifted upwards since January and continues to rise. These findings illustrate a lower probability of upside potential looking ahead. Exhibit 4. Upshifting covariance structure along with weakening price performance relative to the benchmark Factors that investors are pushing away from in FY22 Data: Updata The stock has also lost performance against the medical devices and health care equipment sector since rolling into FY22. We're seeking names that are outsizing peers in the sector, in order to separate away to the upside. For portfolio inclusion, OMCL would ideally be strengthening against the sector, and hence fails this litmus test. Exhibit 5. OMCL is weakening against the medical devices and health care equipment sector as well Data: Updata Idiosyncratic Factors Sales and gross profit have been lumpy over the past 7 years whereas operating profit has remained thin. Free cash conversion has also been light in this time. OMCL is now trading on a 1.5% T12M FCF yield (down from recent averages of ~2.5–3%) and printed a loss of $43 million in FCF last quarter. It has averaged 7.9% quarterly FCF margin since FY15–date, whilst FCF has grown ~10% geometrically in the past 5 years. Operating income declined 44% sequentially and were down 57% YoY to ~$12 million off a base of $28 million in March 2021. Exhibit 6. Operating income and FCF have been lumpy from FY15–date as investors realize a 1.5% T12M FCF yield Data: HB Insights, Refinitiv Meanwhile, earnings have narrowed ~28% YoY to $0.24 and have come down more than 52% from Q4 FY19. After listing 21 years ago, OMCL is yet to deliver a steady stream of quarterly earnings at $1 per share. We've baked in $1.4 billion and $1.5 at the top in FY22 and FY23, respectively, to carry through to a 48.7% gross and 9.6% operating margin this year, potentially driving $3.91 in FY22 EPS. OMCL pays no dividends for additional upside capture/downside cover either. ROIC and ROA have curled over in FY21 and are off pre-pandemic highs, as seen in Exhibit 7. This does help the earnings outlook for OMCL by estimation. However, normalized ROIC is below the WACC of 9.5% and is reasonably stable for medtech at 5.5% per annum. However, this return has not been fed below the bottom line and its asset base generated $0.72 for every $1 capital invested in Q1. As a result of these drivers, available liquidity has drifted lower. Short-term liabilities are now covered less than 2x from liquid assets. Moreover, trends look set to continue. We estimate FCF to decrease 42% YoY in FY22 to $99 million, spiking 53% YoY into FY23. Exhibit 7. Return on capital fails to meet the WACC hurdle at 9.5% whilst liquidity looks drained Data: HB Insights, Refinitiv Valuation factors Investors are paying ~68x forward P/E for access to the low-quality characteristics described above. Shares are also trading at 4.2x book value and are priced at 56x T12M FCF. As seen in the table below, OMCL is trading at a premium to peers across key multiples. The question is if this premium is warranted. Our answer is no, it's not warranted, as there're numerous long-term cash compounders within the GICS industry group of peers that look to offer more respectable upside potential.

Shareholder Returns

OMCLUS Medical EquipmentUS Market
7D0.7%1.9%3.2%
1Y-27.3%-19.1%-10.1%

Return vs Industry: OMCL underperformed the US Medical Equipment industry which returned -20.3% over the past year.

Return vs Market: OMCL underperformed the US Market which returned -11.7% over the past year.

Price Volatility

Is OMCL's price volatile compared to industry and market?
OMCL volatility
OMCL Average Weekly Movement5.0%
Medical Equipment Industry Average Movement9.4%
Market Average Movement7.7%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: OMCL is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: OMCL's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19924,000Randy Lippshttps://www.omnicell.com

Omnicell, Inc., together with its subsidiaries, provides medication management solutions and adherence tools for healthcare systems and pharmacies the United States and internationally. The company offers point of care automation solutions to improve clinician workflows in patient care areas of the healthcare system; XT Series automated dispensing systems for medications and supplies used in nursing units and other clinical areas of the hospital, as well as specialized automated dispensing systems for operating room; Omnicell Interface Software that offers interface and integration between its medication-use products or supply products, and a healthcare facility’s in-house information management systems; and robotic dispensing systems for handling the stocking and retrieval of boxed medications. It also provides central pharmacy automation solutions, including automated storage and retrieval systems, such as XR2 Automated Central Pharmacy System; IV compounding robots and workflow management systems; inventory management software; and controlled substance management systems.

Omnicell, Inc. Fundamentals Summary

How do Omnicell's earnings and revenue compare to its market cap?
OMCL fundamental statistics
Market CapUS$4.86b
Earnings (TTM)US$60.58m
Revenue (TTM)US$1.26b

80.3x

P/E Ratio

3.9x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
OMCL income statement (TTM)
RevenueUS$1.26b
Cost of RevenueUS$653.08m
Gross ProfitUS$604.57m
Other ExpensesUS$543.99m
EarningsUS$60.58m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.37
Gross Margin48.07%
Net Profit Margin4.82%
Debt/Equity Ratio51.7%

How did OMCL perform over the long term?

See historical performance and comparison