Owens & Minor (OMI): Valuation Outlook Following Strategic Shift to Patient Direct and Optum Health Partnership

Owens & Minor (OMI) is shifting its strategy in a big way, rebranding to center entirely around its Patient Direct business after selling off its Products & Healthcare Services segment. The company’s new agreement with Optum Health signals a fresh phase for its home-based care ambitions.

See our latest analysis for Owens & Minor.

Despite management’s renewed focus and the headline Optum Health partnership, the stock has taken a heavy hit this year. Owens & Minor’s share price has dropped 69% year-to-date, and the one-year total shareholder return is down more than 70%. This sharp sell-off stems from continued deep losses, recent operational shake-ups, and uncertainty around the company’s turnaround strategy. Bold strategic changes are now front and center as management seeks to reignite growth and regain investor confidence.

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With the stock trading at a steep discount to analyst targets, but ongoing losses clouding the outlook, the question is whether Owens & Minor is a bargain in disguise or if the market has already priced in its future growth prospects.

Most Popular Narrative: 35.1% Undervalued

The narrative’s fair value is $6.12, well above Owens & Minor’s last close at $3.97. This sharp gap puts the spotlight on the bold projections and catalysts supporting this target.

Ongoing investments in IT infrastructure, supply chain automation, and enhanced revenue cycle management are driving operational efficiencies, already evidenced by improved collection rates and reduced working capital needs. These factors are expected to positively impact earnings and net margins over time.

Read the complete narrative.

What is fueling confidence in such a steep upside? At the heart of this narrative is a future built on margin expansion, operating leverage, and a dramatic turnaround in profitability. Discover how these underlying assumptions create a valuation story that stands apart from recent share price action.

Result: Fair Value of $6.12 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent high debt and potential revenue stagnation in the Patient Direct segment could undermine the company’s turnaround hopes and put pressure on future earnings.

Find out about the key risks to this Owens & Minor narrative.

Build Your Own Owens & Minor Narrative

If you have a different outlook or want to clarify the story for yourself, you can dive into the numbers and craft a perspective in just minutes. 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.

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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.

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