Story updated at 9:55 a.m. to reflect market activity.
Shares of OSI Systems fell -0.8% to $67.08 in morning trading.
The analyst firm also raised its EPS estimates for the company through 2015. The analyst firm cited OSI Systems' new guidance as a reason for the increases.
Separately, TheStreet Ratings team rates OSI SYSTEMS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate OSI SYSTEMS INC (OSIS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.8%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 977.23% to $48.85 million when compared to the same quarter last year. In addition, OSI SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of -2.20%.
- 41.24% is the gross profit margin for OSI SYSTEMS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 2.35% trails the industry average.
- OSIS's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that OSIS's debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering short-term cash needs.
- OSI SYSTEMS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, OSI SYSTEMS INC reported lower earnings of $2.15 versus $2.25 in the prior year. This year, the market expects an improvement in earnings ($3.10 versus $2.15).
- You can view the full analysis from the report here: OSIS Ratings Report
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE.