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Q3 Earnings Preview for Omnicell (NasdaqGS:OMCL)

in EARNINGS/INVESTING IDEAS by

Omnicell, Inc. (NasdaqGS:OMCL) is scheduled to report Q3 earnings results on October 27, 2020.

The company is expected to report earnings of $0.49/share on revenue of $208.9 million. The consensus earnings per share (EPS) of $0.49/share is based on a poll of 7 analysts and represents a decline in eps of −35.7% over the same quarter last year, when the company reported earnings of $0.76/share.

The revenue forecast of $208.9 million based on a poll of 8 analysts implies a year-over-year (YoY) decline in revenue of −8.7%. Last year the company reported $228.8 million in revenue for the quarter.

Expected to report EPS contraction of −35.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $208.89 $228.81 −8.7%
EPS $0.49 $0.76 −35.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from Omnicell, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.23 $0.37 63.9% Beat
Q1, 2020 $0.51 $0.66 29.0% Beat
Q4, 2019 $0.78 $0.77 −1.5% Missed
Q3, 2019 $0.71 $0.76 6.8% Beat
Q2, 2019 $0.63 $0.67 5.6% Beat
Q1, 2019 $0.41 $0.61 50.4% Beat
Q4, 2018 $0.67 $0.70 5.2% Beat
Q3, 2018 $0.56 $0.63 13.4% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 9.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $66.60 $72.65 9.1% Increase
May 7, 2020 $72.67 $68.26 −6.1% Decline
February 6, 2020 $86.91 $85.73 −1.4% Decline
October 24, 2019 $73.72 $71 −3.7% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.93, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.93 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Omnicell, Inc. is currently trading at $80.70/share, up 1.4% for the day. The company is trading at approximately 85.1% of its 52-week high of $94.85/share. The company’s stock price is up 11.1% since the last earnings report and down −1.3% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 63.09 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:OMCL Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 70.30 and a forward P/E multiple of 35.55.

Omnicell, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.89. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $80.70
P/E Ratio 70.3x
P/E Ratio (Fwd) 35.5x
Price To Sales 3.8x
Total Debt / Total Capital 1.7%
Levered Free Cash Flow $144.2 million
EV / EBITDA 33.4x

Finbox

Omnicell, Inc. is a mid-cap stock with a market capitalization of $3.451 billion and a total enterprise value of $3.375 billion. The company operates in the Healthcare sector and the Health Care Technology industry.

Omnicell, Inc., together with its subsidiaries, provides medication management automation solutions and adherence tools for healthcare systems and pharmacies worldwide. The company offers central pharmacy automation solutions, including automated storage and retrieval systems, such as XR2 Automated Central Pharmacy System, a building block of autonomous pharmacy vision; IV compounding robots and workflow management systems; inventory management software; and controlled substance management systems. It also provides point of care automation solutions to improve clinician workflows in patient care areas of the healthcare system; XT Series automated dispensing systems for medications and supplies used in nursing units and other clinical areas of the hospital, as well as specialized automated dispensing systems for operating room; Omnicell Interface Software that offers interface and integration between its medication-use products or supply products, and a healthcare facility’s in-house information management systems; and robotic dispensing systems used in hospitals and retail pharmacies for handling the stocking and retrieval of boxed medications. In addition, the company provides single dose automation solutions to fill and label for incoming prescriptions; medication blister card packaging and packaging supplies to enhance medication adherence in non-acute care settings; automated systems to help pharmacies in filling its multimed adherence packaging based on individual patient medication orders; and semi-automated filling equipment for the long-term care institutional pharmacy. Further, it offers Omnicell Patient Engagement, a web-based nexus of solutions; and patient communication tools, such as interactive voice response, outbound communications, and mobile app. The company was formerly known as Omnicell Technologies, Inc. and changed its name to Omnicell, Inc. in 2001. Omnicell, Inc. was founded in 1992 and is headquartered in Mountain View, California.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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