Is It Time To Consider Buying Omnicell, Inc. (NASDAQ:OMCL)?

Omnicell, Inc. (NASDAQ:OMCL), is not the largest company out there, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. The recent share price gains has brought the company back closer to its yearly peak. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Omnicell’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Omnicell

Is Omnicell Still Cheap?

According to our valuation model, Omnicell seems to be fairly priced at around 1.9% below our intrinsic value, which means if you buy Omnicell today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $54.07, then there’s not much of an upside to gain from mispricing. In addition to this, Omnicell has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Omnicell?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With revenues expected to grow by a double-digit 16% over the next couple of years, the outlook is positive for Omnicell. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in OMCL’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on OMCL, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Omnicell, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Omnicell you should be aware of.

If you are no longer interested in Omnicell, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.