Results: Omnicell, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a mediocre week for Omnicell, Inc. (NASDAQ:OMCL) shareholders, with the stock dropping 11% to US$40.16 in the week since its latest full-year results. It looks like a credible result overall - although revenues of US$1.1b were what the analysts expected, Omnicell surprised by delivering a (statutory) profit of US$0.27 per share, an impressive 47% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Omnicell

After the latest results, the nine analysts covering Omnicell are now predicting revenues of US$1.14b in 2025. If met, this would reflect a satisfactory 2.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 130% to US$0.62. Before this earnings report, the analysts had been forecasting revenues of US$1.16b and earnings per share (EPS) of US$0.56 in 2025. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at US$53.86, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Omnicell, with the most bullish analyst valuing it at US$69.00 and the most bearish at US$40.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Omnicell's revenue growth is expected to slow, with the forecast 2.2% annualised growth rate until the end of 2025 being well below the historical 5.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.8% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Omnicell.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Omnicell following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Omnicell's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Omnicell going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Omnicell you should be aware of.

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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.