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What this page is: Delvantic's full research page for Osi Systems Inc. (OSIS) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-08-23): Designation Low · Gem Score -23 (−100…+100 Quality+Value blend) · Quality 15 · Value -54 · Sentiment -60 (timing only, not weighted) · Composite fair value $142.44 vs $225.56 at analysis
Page map (sections in order; each card carries a stable
reference-name attribute you can cite):
profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
price-history,income-trend,key-metrics,financials(statement tables),insider-trading. The analysis above is public; the raw data tables require a free account.
More for machine readers: site briefing at
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any ticker resolves at delvantic.com/stock/TICKER ·
raw inputs are public-company filings and market data (via licensed data feeds);
every model, score, lens read, and prediction on this page is Delvantic's own analysis.
Osi Systems Inc.
OSIS NASDAQOsi Systems Inc. is a diversified electronics company specializing in design and manufacturing solutions for critical applications, particularly in security and healthcare industries. Its primary function is to provide advanced technology products and systems that enhance safety, health, and efficiency. Known for its security systems, Osi Systems Inc. develops sophisticated screening and detection products used in airports, ports, and borders worldwide, helping to ensure safe transit and operations by detecting potential threats. Additionally, the company's offerings in the healthcare sector include patient monitoring systems and diagnostic equipment, facilitating efficient patient care and accurate diagnostics. With these products, Osi Systems Inc. plays a crucial role in sectors where advanced technological solutions are necessary to maintain safety and improve operational outcomes. Operating globally, the company is headquartered in Hawthorne, California, and continually contributes to both security technologies and medical instrumentation markets, serving a critical function in supporting infrastructure and healthcare systems internationally.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 8.71
Total Equity: $951.08M
Shares: 17,178,000
Total Debt: $471.63M
Cash: $106.41M
EBITDA: $261.10M
Total Debt: $471.63M
Cash: $106.41M
Revenue: $1.71B
Revenue: $1.71B
Revenue: $1.71B
Total Equity: $951.08M
Tax Rate: 19.6%
Equity: $951.08M
Total Debt: $471.63M
Cash: $106.41M
Current Liabilities: $696.94M
Long-Term Debt: $463.50M
Total Debt: $471.63M
Total Equity: $951.08M
Shares: 17,178,000
Shares: 17,178,000
CapEx: -$23.83M
Shares: 17,178,000
Stock Price: $222.81
Net Income: $149.64M
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 3, 2026 5:35pm (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.1B | $1.2B | $1.3B | $1.5B | $1.7B |
| Cost of Revenue | $727.0M | $758.8M | $847.9M | $1.0B | $1.1B |
| Gross Profit | $419.9M | $424.4M | $430.5M | $530.5M | $587.2M |
| Operating Expenses | $304.5M | $302.7M | $295.2M | $341.4M | $369.7M |
| Operating Income | $115.4M | $121.7M | $135.3M | $189.1M | $217.5M |
| Net Income | — | — | $91.8M | $128.2M | $149.6M |
| EBITDA | $159.2M | $160.4M | $173.8M | $231.3M | $261.1M |
| EPS | $4.12 | $6.57 | $5.45 | $7.55 | $8.93 |
| EPS (Diluted) | $4.03 | $6.45 | $5.34 | $7.38 | $8.71 |
Balance Sheet (Annual)
Last updated: Aug 3, 2026 5:18pm (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $80.6M | $64.2M | $76.8M | $95.4M | $106.4M |
| Total Current Assets | $709.4M | $746.1M | $839.9M | $1.2B | $1.4B |
| Total Assets | $1.4B | $1.4B | $1.6B | $1.9B | $2.2B |
| Current Liabilities | $344.8M | $614.0M | $571.7M | $814.6M | $696.9M |
| Long-Term Debt | $276.4M | $48.7M | $136.5M | $129.4M | $463.5M |
| Total Liabilities | $744.5M | $804.7M | $829.5M | $1.1B | $1.3B |
| Total Equity | $639.8M | $638.4M | $726.2M | $863.5M | $951.1M |
| Retained Earnings | $548.8M | $663.9M | $736.0M | $861.2M | $942.3M |
Cash Flow (Annual)
Last updated: Aug 3, 2026 5:35pm (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $139.1M | $63.8M | $94.8M | -$87.5M | $97.6M |
| Capital Expenditure | -$15.8M | -$14.9M | -$15.8M | -$22.1M | -$23.8M |
| Free Cash Flow | $123.3M | $48.9M | $79.0M | -$109.6M | $73.8M |
| Acquisitions (net) | -$3.0M | -$14.1M | -$7.1M | -$9.0M | -$76.7M |
| Net Debt Issued / (Repaid) | $-318,000 | $4.3M | -$149.1M | -$7.0M | $332.4M |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$37.5M | -$111.6M | -$34.7M | $0 | -$80.4M |
| Net Change in Cash | $4.5M | -$16.4M | $12.5M | $18.6M | $11.1M |
Growth Trends (YoY %)
Last updated: Aug 3, 2026 5:35pm (20d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +3.2% | +8.0% | +20.4% | +11.3% |
| Gross Profit Growth | +1.1% | +1.4% | +23.2% | +10.7% |
| Operating Income Growth | +5.5% | +11.1% | +39.8% | +15.1% |
| Net Income Growth | — | — | +39.6% | +16.8% |
| EBITDA Growth | +0.8% | +8.3% | +33.1% | +12.9% |
Deep Analysis
Narrative Economics
market-narrative step).
Claude Reading
The raw numbers tell a coherent story that the synthesis model badly mis-weights. OSI just posted TTM revenue of ~$1.807B (sum of last four quarters: 453.2+464.1+384.6+505.0) versus FY2025's $1.71B and FY2023's $1.28B — that's ~18.7% two-year revenue growth, not stagnation. TTM net income runs ~$152B (40.2+38.7+20.6+52.7 = $152.2M), essentially flat vs FY2025's $149.6M, but the seasonality is real: Q1 (Sep) is always the trough (5.2-5.3% margins two years running) and Q4 (Jun) the peak. On $152M TTM earnings and $3.65B cap, that's a 24x P/E — for a business compounding revenue mid-teens and earnings mid-20s with 15.7% ROE, 13.3% ROIC, and a clean 0.50 debt/equity. This is not a distressed setup.
The synthesis verdict of $36 fair value against a $223 price — an alleged 84% overvaluation — is not credible and I dissent from it flatly. A $36 fair value on $152M in earnings implies a ~4x P/E for a mid-teens grower with double-digit ROIC. That's a bankruptcy multiple, and nothing in the balance sheet supports it: current ratio 2.04, net debt ~$365M against $217M annual operating income (1.7x), equity of $951M. The DCF anchor the narrative layer keeps referencing is clearly using a punitive terminal growth or discount rate assumption, or is choking on the FCF number ($73.8M) which looks depressed vs $149.6M net income — that's the one legitimate red flag (FCF conversion of ~49%, and FCF CAGR is negative). But one year of working-capital-driven FCF weakness doesn't compress fair value by 84%; it might justify a 15-20% haircut on a DCF, not a wholesale rejection of the earnings stream.
The market-forces "value trap / aggressive accounting" framing is doing heavy lifting without evidence. The insider activity shown is almost entirely F-InKind (tax withholding on vesting) and A-Awards (grants) — these are not discretionary sales and calling this "unusual selling activity" is a misread of the transaction codes. The narrative layer's characterization of OSI as pricing in "platform monopoly" at 524% premium is also overwrought: 24x earnings for a 16% revenue grower with a defensible security-screening franchise (TSA, CBP, international airports/ports) is not a monopoly multiple — it's roughly in line with quality industrials like RBC, HEI, or TDG at similar growth profiles, and cheaper than most. The Healthcare and Optoelectronics segments provide genuine diversification. The 28% drawdown from ~$312 already reflects some of the enthusiasm being wrung out.
The legitimate contrarian case is narrower than the models suggest: FCF/NI conversion at 49% is weak and needs to normalize; Q1 FY26 (Sep 2025) revenue of $384.6M was only +11.8% YoY vs $344M and margin repeated at 5.3% — no operating leverage yet at the seasonal trough; and TSA/DHS capex is genuinely lumpy, so the mid-teens growth may not annualize. If FCF stays at $74M, the stock trades at 49x FCF, which IS rich. That's the real bear argument, not the accounting-fraud innuendo. Fair value on a blended earnings/FCF basis with 12-14% cost of equity and 8-10% terminal growth lands me somewhere in the $180-215 range — modestly overvalued, not catastrophically so. I'd want a pullback to sub-$190 (roughly 20x TTM earnings) for a comfortable entry, but at $223 this is a hold, not a sell, and definitely not a $36 stock. The models disagree with each other (Market Forces says "Neutral," Synthesis says -84%, Narrative says structural bet) and the synthesis conclusion is the outlier that should be discounted most heavily.
GPT Reading
What jumps out first is that the business itself is not broken at all; in fact the income statement has been getting better for several years. Revenue rose from $1.15B in FY2021 to $1.71B in FY2025, a 49% increase, while operating income nearly doubled from $115.4M to $217.5M. Gross margin improved from roughly 36.5% in FY2021 to 34.3% in FY2025 if you use the provided figures it looks slightly lower, but operating leverage is the bigger point: operating margin expanded from about 10.0% to 12.7%, and net income reached $149.6M. The quarterly pattern also supports a company with real earnings power rather than a one-off spike: over the last four reported quarters, revenue totaled about $1.81B and net income about $153M, with margins mostly in the 8%-10% range except for the seasonally weaker September quarter at 5.3%. At $3.65B market cap and $365M net debt, enterprise value is roughly $4.0B, which puts the stock around 2.2x trailing revenue, 26x earnings, and about 18x trailing operating income. For a company compounding sales in the mid-teens and earnings materially faster, that is not crazy.
What does make me cautious is cash conversion. FY2025 operating cash flow was only $97.6M against $149.6M of net income, and free cash flow was just $73.8M, barely half of reported earnings. That is the cleanest reason the stock is not obviously cheap. If I capitalize $74M of FCF, the equity is expensive; if I capitalize $150M of earnings with confidence that conversion will normalize, it is much more reasonable. The balance sheet is fine rather than pristine: $471.6M debt against $106.4M cash and $951.1M equity is manageable, with a current ratio above 2.0, but this is not a net-cash compounder that deserves a premium simply for financial strength. So the raw data tells me OSI is a good operating business with mediocre recent cash realization, not a fraud and not a hidden bargain.
That is why I do not buy the extreme bearish valuation outputs. A claimed fair value in the $36-$38 range is detached from the company’s actual earnings base. Even a very punitive 12x multiple on FY2025 earnings of $149.6M would imply an equity value around $1.8B, or roughly half today’s market cap, not one-sixth. And if I look at EV/EBITDA of 15.9x, that is full but not absurd for a niche security/healthcare technology supplier with ROIC of 13.3% and revenue growth still running 11.3% year over year in the latest quarter. The quarterly numbers also do not show a collapse: March revenue was $453.2M versus $444.4M a year earlier, and net income rose from $41.1M to $40.2M—slightly lower in dollars there, but over the last twelve months total profit still held up. This looks like a stock that may have outrun its cash flow, not a business worth 84% less.
The best case against my relatively balanced read is straightforward: cash flow quality may be signaling that the accounting earnings are structurally too generous for a contract-driven business. If working capital keeps absorbing cash, then the right earnings measure is not $150M but something closer to $75M-$100M of sustainable FCF, and on that basis the current valuation is demanding. The latest annual free cash flow yield is only about 2.0% on market cap, and even on enterprise value it is under 2%. For a company exposed to procurement cycles, government budgets, and uneven quarter-to-quarter margins, that is thin. Bears can also point out that the recent quarterly run-rate, about $151M of net income over the last four quarters, is not really accelerating beyond FY2025, so paying 25-26x earnings for a business with single-digit net margins and lumpy cash generation may simply be too rich. That is the strongest criticism, and it is serious.
What would change my mind either way is very specific. If the next annual report shows operating cash flow rebounding toward or above net income—say OCF above $140M and FCF above $110M while revenue stays near the current $1.8B run-rate—then I would become more constructive because the main valuation objection would weaken materially. On the other hand, if revenue growth slows below 5%, quarterly margins remain stuck near the 8% area, and another year of $150M-ish net income produces sub-$90M free cash flow, then the stock deserves a lower multiple, likely below $200 and possibly closer to the high $170s/low $180s. Today I see a quality operator priced a bit rich, but nowhere near the catastrophe implied by the model outputs.
Grok Reading
The numbers tell a story of a real growth compounder whose reported profits are running well ahead of the cash the business actually throws off. Revenue has climbed from $1.15B in FY21 to $1.71B in FY25, a 15.8% CAGR, while net income scaled from the low-to-mid nine figures into $149.6M with operating margin expanding to 12.7% and ROIC at a respectable 13.3%. Quarterly run-rate is still advancing—trailing four quarters sit near $1.81B—but the latest print ($453M, only +2% YoY) and the Q1 seasonal troughs show clear deceleration after the 2023–24 acceleration. The balance sheet is serviceable (net debt roughly $365M, D/E 0.50, current ratio 2.0), yet free cash flow of just $73.8M against $149.6M of earnings and a negative 3.4% FCF CAGR is the central contradiction: earnings quality is mediocre, working-capital intensity is high, and the 49× price-to-FCF multiple is what the market is actually paying, not the headline 26× P/E.
That cash-conversion gap is why the prior models’ $36–38 “fair value” is unusable noise; it implies a mid-single-digit earnings multiple on a business still growing double digits with 34% gross margins and sticky security/healthcare end markets. At the same time, the 26× P/E, 16× EV/EBITDA and 2.3× sales are not a bargain once you normalize for the fact that only half of earnings convert to cash and organic growth is cooling. The 28% drawdown from the $312 high has simply brought an over-extended narrative multiple back toward something closer to industrial-tech reality. Insider filings are mostly award and withhold activity, not the aggressive open-market dumping the secondary signals imply, so that particular red flag is overstated.
The strongest case against this read is the multi-year earnings trajectory and the structural positioning. Earnings CAGR of 27.7%, operating profit up from $115M to $218M in four years, and a security-screening franchise that still benefits from TSA/CBP and international border modernization cycles give bulls a clean “missed the bottom” argument. If the next two quarters re-accelerate toward the mid-teens revenue growth seen in late 2024/early 2025 and FCF conversion moves back above 70%, the current $223 price becomes a reasonable entry on a high-teens earner rather than a value trap. The bear counter—that customer concentration and capex-cycle risk make the 15–16× EV/EBITDA multiple permanently fragile—has merit, but it does not justify treating a $3.7B market-cap franchise as a $600M equity.
What flips the view is straightforward: two consecutive quarters of FCF above $40M (proving the earnings-to-cash gap is temporary) plus a return to >10% organic revenue growth would make the stock modestly cheap into the mid-$200s. Conversely, another sub-5% revenue quarter paired with FCF remaining under $20M would confirm the multiple compression is unfinished and push fair value toward $170–180.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Revenue has compounded from $1.15B (2021) to $1.71B (2025), a ~10% CAGR, with operating margin stepping up from 10.1% to 12.7% and net income reaching $149.6M. Gross margin drifted lower (36.6% to 34.3%) but was more than offset by operating leverage, suggesting the mix is scaling well against fixed costs. Diluted share count has actually shrunk (18.4M to 17.2M, -1.7% CAGR) with buybacks running 183% of SBC and SBC only ~1.9% of revenue - genuine per-share value concentration, not the usual tech dilution.
Verify before trusting this (6)
- 10-K working capital detail - is the OCF/NI gap driven by inventory build for security backlog or by receivables aging?
- Revenue recognition policy on long-cycle security/inspection contracts (percentage-of-completion vs delivery)
- Debt maturity schedule and covenants given $365M net debt
- Customer concentration in the Security segment (large government contracts)
- Any recent M&A that would explain 2024 FCF collapse and 2023-2024 revenue jump
- CEO Chopra's remaining holdings context to size the recent sales
The e2e composite fair value of $38.02 and signal-adjusted $36.15 imply a fantastical -84% downside that I do not take at face value - a DCF at $15 on a profitable, growing mid-cap security-tech franchise is almost certainly a runaway model (likely punitive discount rate or terminal assumptions). The EPV floor of $83.39 is the more useful anchor: it says the current earnings power, capitalized without growth, is worth roughly a third of today's price. To justify $225.56 you need multi-year double-digit growth in Security and Healthcare plus sustained margin expansion - exactly the platform-monopoly narrative priced in.
Verify before trusting this (5)
- Segment growth and margin trajectory in Security vs Healthcare vs Optoelectronics
- OCF-to-net-income conversion and working capital drivers in the latest 10-Q
- Backlog and contract renewal cadence with TSA/DHS
- Net leverage and interest coverage given the buyback pace
- Whether the $15 DCF reflects a defensible WACC/terminal or is a model error
OSIS trades on a platform-monopoly story that the market is starting to poke holes in. The narrative intensity is strong but durability is only moderate and cult coefficient is low - meaning holders are rational allocators, not diamond hands, so when the story cracks there is no fanbase to catch the falling knife. The May 5 tape action is the tell: record earnings, beat estimates, and the stock still dropped 17% on soft guidance. That is a classic signature of a name where expectations have outrun what the business can deliver, and the marginal buyer has stopped showing up. The macro tape is neutral-to-slightly-constructive, but with beta 1.2, a 10y at 4.68%, and market PE at 26.9, high-multiple narrative stocks are exactly the cohort that gets re-rated when rates stay sticky. OSIS is not a defensive compounder that shrugs this off; it is a mid-cap industrial priced like a tech platform, which is the worst possible profile in a rates-elevated regime. Analyst tone is not screaming capitulation yet, but the guidance-driven selloff suggests sell-side is quietly trimming targets. Net: the non-fundamental pressure leans negative. Not a collapse, but a persistent de-rating grind where any narrative crack gets punished harder than fundamentals warrant.
Verify before trusting this (5)
- Sell-side target revisions in the 30-60 days post the May guide-down - are targets being cut faster than earnings estimates
- Next earnings guide: does management reset expectations lower or double down on the growth story
- Any TSA/DHS budget headlines or contract award news that either validates or cracks the monopoly narrative
- Sector rotation signals - if defensives bid and high-multiple industrials get sold, OSIS underperforms
- Insider selling activity - a low-cult stock at a 500% narrative premium is where insiders typically monetize
This lens hasn't been run for this ticker yet.
When we made this prediction on Aug 5, 2026, OSIS was $236.60. We expect it to be $202.00 by Feb 2027, and we consider it great value under $150.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 5, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.