Roth Capital Believes OSI Systems (NASDAQ: OSIS) Still Has Room to Grow

By Carrie Williams

Roth Capital analyst Jeff Martin reiterated a Buy rating on OSI Systems (NASDAQ: OSIS) yesterday and set a price target of $85. The company’s shares closed yesterday at $80.21, close to its 52-week high of $81.55.

Martin commented:

“We believe the acquisition adds $60-70mm annually, and estimate ~40% comes from service and consumables. The transaction is likely to close in the September quarter (F1Q18) and is pending approval from regulators in the U.S., E.U. and Portugal. We expect cost synergies will be minimal. Management has stated the transaction will be immediately accretive to non-GAAP EPS. Morpho ETD transaction: Installed base of 11,000 units, with ~40% of revenue from service and consumables, according to our discussion with management. Appeal of transaction is a more comprehensive aviation checkpoint offering.”

According to, Martin is a 5-star analyst with an average return of 14.5% and a 64.1% success rate. Martin covers the Services sector, focusing on stocks such as Barrett Business Services, Franklin Covey Company, and US Auto Parts Network.

Currently, the analyst consensus on OSI Systems is Moderate Buy and the average price target is $85, representing a 6.0% upside.

In a report issued on May 31, Jefferies also reiterated a Buy rating on the stock with a $85 price target.

OSI Systems’ market cap is currently $1.5B and has a P/E ratio of 61.7. The company has a book value ratio of 2.7025.

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OSI Systems, Inc. is an integrated designer and manufacturer of specialized electronic systems and components for critical applications. The firm sells its products and provides services in diversified markets, including homeland security, healthcare, defense and aerospace. It operates through the following segments: Security; Healthcare; and Optoelectronics and Manufacturing. The Security segment provides security inspection systems; turnkey security screening solutions; and related services. The Healthcare segment offers patient monitoring, cardiology, anesthesia systems, and defibrillator products. The Optoelectronics and Manufacturing segment covers specialized electronic components and electronic manufacturing services for the Security and Healthcare segments. The company was founded by Deepak Chopra in May 1987 and is headquartered in Hawthorne, CA.