# OSI Systems (OSIS.US)

Canonical: https://gigainvestors.com/s/OSIS

Analysis as of: 2026-10-16T07:30:58.415Z. Financial observations: FY1998–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $196.21 per share; close as of 2026-10-15.

Estimated value: low $150.62 per share, central $199.93 per share, high $230.96 per share. Buy at or below the central value $199.93 per share. Valuation as of 2026-10-16T07:30:58.415Z; scenarios are not confidence intervals.

Expected annual return: 10.1% at the stated quote. About 10.1% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 1

- Operating margin variation: 0.32×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.03×

- FY2018: 0.05×

- FY2019: 0.08×

- FY2020: 0.09×

- FY2021: 0.10×

- FY2022: 0.10×

- FY2023: 0.11×

- FY2024: 0.12×

- FY2025: 0.13×

- FY2026: 0.12×

### moat: fail

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 15.5%

- ROIC, second-lowest year: 7.6%

- Typical minus recent gross margin: 2.0 pp

- Typical gross margin (annual median): 35.2%

- Recent gross margin (lower of latest and 3-year median): 33.2%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.6%

- ROIC including acquisitions, ten-year median: 9.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 5.4%

- FY2018: 7.6%

- FY2019: 13.7%

- FY2020: 17.0%

- FY2021: 16.0%

- FY2022: 15.9%

- FY2023: 15.5%

- FY2024: 15.5%

- FY2025: 15.3%

- FY2026: 16.5%

### economics: fail

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 1.05×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $671M

- Net income, five-year total: $640M

- Return on incremental invested capital: 29.0%

- Working capital / revenue, annual change: 2.7 pp

- Working capital / revenue, change between three-year averages: 19.9 pp

- Working capital / revenue, final three-year average: 57.6%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.07×

- FY2023: 1.07×

- FY2024: 1.02×

- FY2025: 1.01×

- FY2026: 1.08×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 7.6% vs 15.5%

- Per-share earnings: 1.07 to 8.71 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.5%

- Ordinary dilution, 5-year annual growth: -1.2%

- Market cap gain: $2.1B

- Cumulative retained earnings: $488M

- Diluted shares, 10-year annual growth: -1.5%

- Diluted shares, 5-year annual growth: -1.2%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 30.0%

- Per-share value change: $7.64

- Per-share value, starting three-year median: $1.07

- Per-share value, ending three-year median: $8.71

- Buybacks concentrated in cheaper years (correlation): 0.07

- Average buyback yield: 3.5%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $452M

- Cumulative net income, 10 years: $846M

- ROIC, first three-year median: 7.6%

- ROIC, last three-year median: 15.5%

Chart: Earnings per share; fiscal year observations.

- FY2017: $1.07

- FY2018: -$1.57

- FY2019: $3.46

- FY2020: $4.05

- FY2021: $4.03

- FY2022: $6.45

- FY2023: $5.34

- FY2024: $7.38

- FY2025: $8.71

- FY2026: $8.95

### accounting: pass

- restructuring or one-time charges in at least three of five years

- Sloan accruals: -4.8%

- Receivables to sales index (DSRI): 0.88×

- Restructuring years, last five: 4

- Stock compensation / operating cash flow: 9.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.78×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.72×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -3.4%

- FY2018: -12.9%

- FY2019: -4.3%

- FY2020: -4.3%

- FY2021: -4.7%

- FY2022: 3.6%

- FY2023: -0.2%

- FY2024: 11.1%

- FY2025: 2.3%

- FY2026: -4.8%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 32% since Apr 2026 · "Why OSI Systems (OSIS) Is Down 9.4% After Record Backlog And Delayed Revenue Conversion" (finance.yahoo.com, Aug 2026) · sales +4.3%

Story as of 2026-10-16T09:59:20.895Z; price observation 2026-10-15.

Price needs cash profits to grow 5.3% a year for ten years

- 2025-04-15: OSI Systems Receives $24 Million Order for Cargo and Vehicle Inspection Systems ([finance.yahoo.com](https://finance.yahoo.com/news/osi-systems-receives-24-million-123000645.html))

- 2025-05-15: OSIS Q1 Earnings Call: Higher Service Revenues and Backlog Support Guidance Amid Tariff Uncertainty ([finance.yahoo.com](https://finance.yahoo.com/news/osis-q1-earnings-call-higher-200120467.html))

- 2025-09-10: OSI Systems (OSIS) Secures US$26 Million Order For Security RF Systems ([finance.yahoo.com](https://finance.yahoo.com/news/osi-systems-osis-secures-us-182602507.html))

- 2025-10-02: OSI Systems Receives $37 Million Order to Provide RF-based Solutions ([finance.yahoo.com](https://finance.yahoo.com/news/osi-systems-receives-37-million-123000311.html))

- 2026-04-23: OSI Systems Receives $235 Million Homeland Defense Contract ([finance.yahoo.com](https://finance.yahoo.com/sectors/technology/articles/osi-systems-receives-235-million-123000896.html))

- 2026-08-22: Why OSI Systems (OSIS) Is Down 9.4% After Record Backlog And Delayed Revenue Conversion ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/why-osi-systems-osis-down-071243765.html))

### Sales · FY2025–2026

sales +4.3%; source https://www.sec.gov/Archives/edgar/data/1039065/000110465926099752/osis-20260630x10k.htm; observed 2026-08-21.

- FY2017: $961M 

- FY2018: $1.1B 

- FY2019: $1.2B 

- FY2020: $1.2B 

- FY2021: $1.1B 

- FY2022: $1.2B 

- FY2023: $1.3B 

- FY2024: $1.5B 

- FY2025: $1.7B 

- FY2026: $1.8B 

### Gross margin · FY2026

gross margin 33.2%; source https://www.sec.gov/Archives/edgar/data/1039065/000110465926099752/osis-20260630x10k.htm; observed 2026-08-21.

- FY2017: 33.7% 

- FY2018: 36.0% 

- FY2019: 36.4% 

- FY2020: 36.1% 

- FY2021: 36.6% 

- FY2022: 35.9% 

- FY2023: 33.7% 

- FY2024: 34.5% 

- FY2025: 34.3% 

- FY2026: 33.2% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in electronic components; annual sales are USD 1.8 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1039065/000110465926099752/osis-20260630x10k.htm (filed 2026-08-21); FY2026: revenue 1785984000; grossProfit 593092000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); OSIS.US: OSI Systems, Inc. designs and manufactures specialized electronic systems and components for critical applications in the United States, Mexico, the rest of Americas, the United Kingdom, Europe, the Middle East, Africa, and the Asia-Pacific. The company offers security products, such as baggage and parcel inspection, cargo and vehicle inspection, hold baggage screening, people screening, radiation monitoring, explosive and narcotics trace detection, and optical inspection systems; turnkey security screening services for enterprise inspection process integration, operator training, and the staffing and operation of security screening checkpoints under the S2 brand. It also provides trace detection systems for trace amounts of explosives and narcotics and people screening products, including walk-through metal detectors for use at security checkpoints at airports, government buildings, sports arenas, and other venues; digital and analog high-power RF systems; and active components for detection of lights of different wavelengths and converts light into electrical signals. In addition, the company offers devices for emitting light in the form of lasers; passive components for amplifying, separating, and reflecting light under the OSI Optoelectronics brand; and printed circuit board assemblies, cable and harness assemblies, and complete systems. Further, it provides bedside monitors, such as the Xprezzon and Qube, as well as telemetry solutions; Spacelabs SafeNSound for assisting hospitals; predictive analytics clinical decision support solutions; Pathfinder SL and Lifescreen Pro analysis tools; and Eclipse Pro Holter recorders. Additionally, the company offers Eclipse Mini Ambulatory ECG recorders; ambulatory blood pressure monitors; Spacelabs OnTrak ambulatory blood pressure systems; Sentinel, a cardiology information management system; and multivendor compatible accessories. OSI Systems, Inc. was incorporated in 1987 and is headquartered in Hawthorne, California.

### Why customers stay

Margins ranged from 33.2% to 34.5% during 2024–26; it earns 15.5% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); FY2024: grossProfit / revenue = 34.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); FY2025: grossProfit / revenue = 34.3%.

- Source: https://www.sec.gov/Archives/edgar/data/1039065/000110465926099752/osis-20260630x10k.htm (filed 2026-08-21); FY2026: grossProfit / revenue = 33.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); 10-year return on capital observations [[2017,0.05400126638369299],[2018,0.07624068763099207],[2019,0.1367539720346246],[2020,0.16950890869233562],[2021,0.16039110932208273],[2022,0.1587451922709633],[2023,0.1554683204418242],[2024,0.15509321403933782],[2025,0.1534821704585273],[2026,0.16464636504214766]]; median 0.155280767240581. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Reinvests 15.7% of cash earnings; earns 29% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); FY2017: growth capex 0; upkeep 22243000; cash acquisitions 188542000; owner earnings 67068000. Growth capex plus acquisitions / owner earnings = 2.8112065366493706.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); FY2019: growth capex 0; upkeep 30215000; cash acquisitions 18271000; owner earnings 90815000. Growth capex plus acquisitions / owner earnings = 0.2011892308539338.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); FY2020: growth capex 0; upkeep 34416000; cash acquisitions 8940000; owner earnings 90594000. Growth capex plus acquisitions / owner earnings = 0.09868203192264388.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); FY2021: growth capex 0; upkeep 29511000; cash acquisitions 3000000; owner earnings 88393000. Growth capex plus acquisitions / owner earnings = 0.03393933908793683.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); FY2022: growth capex 0; upkeep 30487000; cash acquisitions 14132000; owner earnings 123539000. Growth capex plus acquisitions / owner earnings = 0.11439302568419689.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); FY2023: growth capex 0; upkeep 32254000; cash acquisitions 7101000; owner earnings 98037000. Growth capex plus acquisitions / owner earnings = 0.07243183695951529.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); FY2024: growth capex 0; upkeep 39432000; cash acquisitions 9046000; owner earnings 130931000. Growth capex plus acquisitions / owner earnings = 0.0690898259388533.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); FY2025: growth capex 0; upkeep 41497000; cash acquisitions 76739000; owner earnings 151720000. Growth capex plus acquisitions / owner earnings = 0.5057935670972845.

- Source: https://www.sec.gov/Archives/edgar/data/1039065/000110465926099752/osis-20260630x10k.htm (filed 2026-08-21); FY2026: growth capex 0; upkeep 30570000; cash acquisitions 26267000; owner earnings 166791000. Growth capex plus acquisitions / owner earnings = 0.1574845165506532.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); Incremental return on capital 0.29003143478993454, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); Dividend observations: [[2017,0],[2018,0],[2019,9152000],[2020,6103000],[2021,5517000],[2022,4796000],[2023,7707000],[2024,0],[2025,0],[2026,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1039065/000110465926099752/osis-20260630x10k.htm (filed 2026-08-21); FY2026: cash repurchases 271905000 USD.

### Are managers owners

Insiders own 4.9% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); OSIS.US SharesStats.PercentInsiders = 4.872 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 5.3% yearly over ten years; actual growth was 12.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-21); Ten-year compound average after fade. Initial solved rate 0.06348356948926581. Price 196.21; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 3.0145945407451684 → FY2026 9.652256944444444. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $70.13 per share

- 2016-11: $75.70 per share

- 2016-12: $76.12 per share

- 2017-01: $74.67 per share

- 2017-02: $75.42 per share

- 2017-03: $72.99 per share

- 2017-04: $77.40 per share

- 2017-05: $79.19 per share

- 2017-06: $75.15 per share

- 2017-07: $79.97 per share

- 2017-08: $83.06 per share

- 2017-09: $91.37 per share

- 2017-10: $88.38 per share

- 2017-11: $86.66 per share

- 2017-12: $64.38 per share

- 2018-01: $66.08 per share

- 2018-02: $63.14 per share

- 2018-03: $65.27 per share

- 2018-04: $64.02 per share

- 2018-05: $68.58 per share

- 2018-06: $77.33 per share

- 2018-07: $79.76 per share

- 2018-08: $77.89 per share

- 2018-09: $76.31 per share

- 2018-10: $69.16 per share

- 2018-11: $72.40 per share

- 2018-12: $73.30 per share

- 2019-01: $89.69 per share

- 2019-02: $86.85 per share

- 2019-03: $87.60 per share

- 2019-04: $90.13 per share

- 2019-05: $103.59 per share

- 2019-06: $112.63 per share

- 2019-07: $112.56 per share

- 2019-08: $105.01 per share

- 2019-09: $101.56 per share

- 2019-10: $99.24 per share

- 2019-11: $99.49 per share

- 2019-12: $100.74 per share

- 2020-01: $86.54 per share

- 2020-02: $81.27 per share

- 2020-03: $68.92 per share

- 2020-04: $72.38 per share

- 2020-05: $75.77 per share

- 2020-06: $74.64 per share

- 2020-07: $70.96 per share

- 2020-08: $78.75 per share

- 2020-09: $77.61 per share

- 2020-10: $77.16 per share

- 2020-11: $88.10 per share

- 2020-12: $93.22 per share

- 2021-01: $90.02 per share

- 2021-02: $94.62 per share

- 2021-03: $96.10 per share

- 2021-04: $96.57 per share

- 2021-05: $96.36 per share

- 2021-06: $101.64 per share

- 2021-07: $100.05 per share

- 2021-08: $98.94 per share

- 2021-09: $94.80 per share

- 2021-10: $93.11 per share

- 2021-11: $90.93 per share

- 2021-12: $93.20 per share

- 2022-01: $82.94 per share

- 2022-02: $80.67 per share

- 2022-03: $85.12 per share

- 2022-04: $79.10 per share

- 2022-05: $83.92 per share

- 2022-06: $85.44 per share

- 2022-07: $96.67 per share

- 2022-08: $83.32 per share

- 2022-09: $72.06 per share

- 2022-10: $82.18 per share

- 2022-11: $88.48 per share

- 2022-12: $79.52 per share

- 2023-01: $94.71 per share

- 2023-02: $92.55 per share

- 2023-03: $102.36 per share

- 2023-04: $112.96 per share

- 2023-05: $119.01 per share

- 2023-06: $117.83 per share

- 2023-07: $119.23 per share

- 2023-08: $136.35 per share

- 2023-09: $118.04 per share

- 2023-10: $104.27 per share

- 2023-11: $123.29 per share

- 2023-12: $129.05 per share

- 2024-01: $128.03 per share

- 2024-02: $131.18 per share

- 2024-03: $142.82 per share

- 2024-04: $131.44 per share

- 2024-05: $143.74 per share

- 2024-06: $137.52 per share

- 2024-07: $147.98 per share

- 2024-08: $149.87 per share

- 2024-09: $151.83 per share

- 2024-10: $132.21 per share

- 2024-11: $177.40 per share

- 2024-12: $167.43 per share

- 2025-01: $196.44 per share

- 2025-02: $206.21 per share

- 2025-03: $194.34 per share

- 2025-04: $204.74 per share

- 2025-05: $219.11 per share

- 2025-06: $224.86 per share

- 2025-07: $221.01 per share

- 2025-08: $230.05 per share

- 2025-09: $249.24 per share

- 2025-10: $278.46 per share

- 2025-11: $270.85 per share

- 2025-12: $255.06 per share

- 2026-01: $250.14 per share

- 2026-02: $285.20 per share

- 2026-03: $265.51 per share

- 2026-04: $286.92 per share

- 2026-05: $216.75 per share

- 2026-06: $218.70 per share

- 2026-07: $221.39 per share

- 2026-08: $207.91 per share

- 2026-09: $194.37 per share

- 2026-10: $196.21 per share

## Annual estimated value (USD per share)

- FY2017: low $48.46 per share, central $58.79 per share, high $67.35 per share

- FY2018: low $51.79 per share, central $63.26 per share, high $73.23 per share

- FY2019: low $59.62 per share, central $74.45 per share, high $86.30 per share

- FY2020: low $57.95 per share, central $72.31 per share, high $83.96 per share

- FY2021: low $60.81 per share, central $75.74 per share, high $87.91 per share

- FY2022: low $62.15 per share, central $75.70 per share, high $87.89 per share

- FY2023: low $70.77 per share, central $86.79 per share, high $100.75 per share

- FY2024: low $88.51 per share, central $112.98 per share, high $131.44 per share

- FY2025: low $110.81 per share, central $144.56 per share, high $168.44 per share

- FY2026: low $138.96 per share, central $184.45 per share, high $213.07 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1039065/000110465926099752/osis-20260630x10k.htm); period 2026-06-30, filed 2026-08-21.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.