OSI Systems, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
OSI Systems presents a genuinely mixed picture as of the fiscal year ended 30 Jun: revenue growth decelerated to 4.3% with Q4 revenue declining 4.1% YoY, gross margin compressed to 33.2% from 34.3%, and total debt surged to $1.0 billion from $682 million, yet free cash flow improved dramatically to $245.3 million (13.7% margin) and the stock at $197.24 trades at a 21.8x P/E — roughly 27.8% below the peer median of 30.2x.
A new overhang emerged in September 2026 with Pomerantz LLP announcing a securities investigation across three separate releases, while recent $90 million U.S. government RF communication orders and $8 million optoelectronics orders provide revenue support. With the stock below both its 50-day ($213.39) and 200-day ($246.73) moving averages and RSI at 37.7, the market is pricing in uncertainty; patience is warranted until the legal situation clarifies and revenue trends stabilize.
What could go wrong
- Securities investigation. Pomerantz LLP announced investigations into OSI Systems on September 17, 22, and 24, 2026, creating legal uncertainty that could expand into class action litigation or regulatory scrutiny.
- Debt surge and balance sheet deterioration. Total debt jumped to $1.0 billion as of FY2026 from $682 million in FY2025, while stockholders' equity declined to $833 million from $951 million, increasing financial leverage.
- Revenue deceleration and margin compression. FY2026 revenue growth slowed to 4.3% from 11.3%, Q4 revenue fell 4.1% YoY, and gross margin compressed to 33.2% from 34.3%, signaling potential demand softening or mix shift.
- Persistent insider selling. Over the trailing 24 months, insiders net sold 194,252 shares for $30.5 million; the August 2026 cluster acquisitions were code 'A' awards at $206.73, not open-market purchases.
What would change my mind
Where this comes from: FY26 fundamentals · peer comparison · news · technicals, 25 Sep. Orin's read on OSIS; not advice.
How has the share price moved?
Down 20.9% over twelve months, from $254.00 on 27 Oct 2025 to $200.90 at the Tue 27 Oct 2026 close. Its highest close in that time was $309.68 on 17 Apr 2026; the last close is 35.1% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 1.5M, on 18 Nov 2025).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All OSIS filings| Form | Filed | What it says | Read |
|---|---|---|---|
| 10-K | 21 Aug | OSI Systems, Inc. designs and manufactures specialized electronic systems and components for homeland security, healthcare, defense, and aerospace markets. | read |
| 8-K | 20 Aug | OSI Systems reported record fiscal 2026 revenues of $1.79 billion, a 4% increase year-over-year, and record non-GAAP diluted EPS of $10.35, up 11%. | read |
| 13G | 13 Aug | — | on file |
| 13G/A | 6 Aug | — | on file |
| 13G | 31 Jul | — | on file |
| 13G/A | 15 May | — | on file |
| 13G/A | 6 May | — | on file |
| 10-Q | 4 May | OSI Systems, Inc. reported net income of $40.2 million for the three months ended March 31, 2026, a decrease from $41.1 million in the same period of the prior year. | read |
Largest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $558.1M | 0.0% |
| FMR | $380.1M | 0.0% |
| Vanguard Portfolio Management | $278.2M | 0.0% |
| Vanguard Capital Management | $153.8M | 0.0% |
| State Street | $147.4M | 0.0% |
| Geode Capital Management | $101.4M | 0.0% |
| T. Rowe Price Associates | $68.8M | 0.0% |
| Millennium Management | $65.3M | 0.0% |
| Invesco | $57.6M | 0.0% |
| Morgan Stanley | $43.3M | 0.0% |
60 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 160 Form 4 filings; open-market trades net −$53.9M. Of the 50 on hand, none was an open-market trade — the rest are grants, option exercises and tax withholding.
Ask Orin about OSIS
Orin answers questions about OSIS from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 21.7× its last 12 months of profit (Tue 27 Oct close) — higher than in 3 of its last 5 fiscal years (middle 21.6×); the typical Technology company on the NASDAQ is at 46.1×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 21.7×near usual | 21.6× | 46.1× |
| P/S | 1.79×above usual | 1.55× | — |
| EV/EBITDA | 14.7×above usual | 13.2× | — |
| P/B | 4.2×above usual | 2.7× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $270 (from $265 to $274) — 34% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$270
$265 – $274 · +34% against the last close
- 5 buy or overweight
- 1 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 21.7× its last 12 months of profit; the middle P/E of the 4 companies it is compared to that made a profit is 26.1×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| OSISOSI Systems, Inc. | $3B | 21.7× | 14.7× | 33.2% | 8.7% | 18% |
| ESEESCO Technologies Inc. | $6B | 19.6× | 20.4× | 42.0% | 24.4% | 20% |
| MIRMirion Technologies, Inc. | $4B | 133× | 22.1× | 48.1% | 2.7% | 2% |
| MSAMSA Safety Incorporated | $7B | 22.2× | 14.2× | 47.6% | 16.1% | 23% |
| TDYTeledyne Technologies Incorporated | $30B | 29.9× | 19.3× | 38.5% | 15.8% | 9% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 21.7× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now21.7×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $90 a share — 56% below the $201.63 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $90 | 56% below $201.63 |
| Levered | $310 | 54% above $201.63 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.