Owens & Minor (OMI): Losses Accelerate 71.9% Annually, Deep Value Tests Recovery Narratives

Owens & Minor (OMI) remains unprofitable, and its losses have accelerated at a rate of 71.9% per year over the past five years. Revenue is expected to decline sharply by 46.5% per year over the next three years, and profit margins continue in negative territory with no sign of improvement. Despite ongoing operational challenges, shares are currently trading below analyst estimates of fair value, which may catch the eye of value-focused investors.

See our full analysis for Owens & Minor.

Next up, we will see how these headline numbers compare with the most widely followed narratives around the stock. Some may hold up, while others may be brought into question.

See what the community is saying about Owens & Minor

Profit Margins May Finally Turn Positive

• Analysts expect profit margins to increase from -4.0% today to 0.7% within three years, marking a possible end to persistent negative margins.
• According to the analysts' consensus view, strategic moves such as shifting to higher-margin home-based care and investing in operational efficiencies could boost net earnings over time.
  • Efforts to automate supply chains and improve revenue cycle management are already resulting in better collection rates and lower working capital needs. This signals the potential for margin recovery.
  • However, risks remain if cost reduction from divestitures lags, as new operating models can bring transitional expenses that challenge near-term profitability.
• To see how the latest trends and expert perspectives shape the consensus outlook for Owens & Minor, read the full narrative. 📊 Read the full Owens & Minor Consensus Narrative.

High Debt Limits Turnaround Flexibility

• Current net debt stands at $1.9 billion, a figure highlighted as a constraint even after divesting lower-growth segments. Significant interest costs remain on the balance sheet.
• Analysts’ consensus narrative notes the company’s leverage puts a ceiling on its ability to reinvest in growth.
  • If EBITDA fails to scale as anticipated, continued high debt service reduces Owens & Minor’s flexibility to pursue future deals or invest in operations.
  • Recent unsuccessful acquisition attempts, such as the terminated Rotech deal, underscore management’s challenge in executing on growth strategies while servicing debt.

Discounted Valuation Draws Contrasting Views

• With a share price of $3.97, Owens & Minor trades at a deep discount to both analyst price target ($6.20) and DCF fair value ($59.55), despite ongoing operational setbacks.
• Analysts’ consensus narrative finds this gap is only justified if investors are confident in management hitting their $3.0 billion revenue and $20.2 million net earnings forecasts by 2028.
  • The implied 10.4% upside to the analyst target highlights a value opportunity if improvements materialize, but also flags downside risk should growth and profitability fall short.
  • Uncertainties around contract losses, structural changes in healthcare, and stranded costs after divestitures raise doubts about the achievability of projected recovery.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Owens & Minor on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Have a different take on the figures? Take just a few minutes to craft your own perspective and share your narrative. Do it your way

A great starting point for your Owens & Minor research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

See What Else Is Out There

Despite Owens & Minor’s attempts at recovery, persistent high debt and negative margins are limiting its ability to invest in future growth and stability.

If you seek companies with less financial strain and stronger resilience, check out solid balance sheet and fundamentals stocks screener (1983 results) to discover businesses built on firmer financial ground.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com