OSI Systems Delivers Strong Q4, Surpassing Analyst Estimates

OSI Systems (NASDAQ: OSIS) reported impressive Q4 CY2024 results, exceeding market expectations. Revenue surged by 12.5% YoY to $419.8 million, outperforming analyst estimates by 3.2%.

Key Highlights:

* Revenue: $419.8 million vs. $406.6 million (analyst consensus)
* Adjusted EPS: $2.42 vs. $2.33 (analyst consensus)
* Full-year revenue guidance raised to $1.70 billion, surpassing estimates by 0.9%
* Full-year Adjusted EPS guidance increased to $9.25, a 1.1% rise

Financial Performance:

* Operating Margin: 13.8%, in line with the previous year
* Backlog: $1.8 billion at quarter-end
* Market Capitalization: $2.82 billion

Business Overview:

OSI Systems designs and manufactures specialized electronic systems and components, with a focus on security inspection systems.

Sales Growth:

* 6.4% compounded annual growth rate over the last five years
* 17.7% annualized revenue growth over the last two years, suggesting accelerated demand

Security Segment:

* 30.5% YoY average growth over the last two years
* Contributed to strong overall revenue performance

Analyst Projections:

* 5.1% revenue growth forecasted for the next 12 months, indicating a deceleration

Operating Margin:

* 10.8% average operating margin over the last five years
* 3.5 percentage point increase in operating margin over the same period

Earnings Per Share:

* 14% compounded annual growth rate in EPS over the last five years
* 8.8% reduction in share count during that time
* 26% annual EPS growth rate over the last two years
* Q4 EPS of $2.42, beating estimates by 3.9%
* $8.67 full-year EPS estimate for the next 12 months, indicating a 7.6% growth rate

Key Takeaways:

OSI Systems exceeded expectations in Q4, driven by strong security segment performance. The company also raised its full-year guidance. The solid financial performance and positive analyst projections suggest that OSI Systems remains a potential investment opportunity.