On April 2, 2014, Zacks Investment Research upgraded
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Over the past 60 days, Omnicell has been witnessing rising
estimate revisions for 2014 with three upward revisions against
no downward movement. The positive revisions drove a 6.5% rise in
Zacks Consensus Estimate to 99 cents per share over the same time
frame. Moreover, Omnicell has an estimated long-term growth of
19.3%, up 210 basis points from the industry average growth of
17.2%. This implies healthy prospects over the long haul.
This global leader in the medical information systems industry
reported mixed fourth-quarter and full year 2013 results on Feb
4. Revenues for 2013 beat the Zacks Consensus Estimate by
1.2%. For full-year 2013, Omnicell reported adjusted earnings per
share (EPS) of 77 cents, up 28.3% from the year-ago level of 60
Omnicell provided a promising guidance for full-year 2014. Per
the guidance, full year 2014 adjusted EPS forecast lies in the
band of $1.17-$1.23. The Zacks Consensus Estimate of 99 cents
lies far below the company's guidance. Thus, Omnicell's EPS
guidance represents an annualized growth rate of 52%-60%. The
company's liquidity also improved significantly as it exited 2013
with cash and cash equivalents of $104.5 million, up 67.7% from
the 2012-end level.
Moreover, Omnicell was awarded the certification
for International Organization for Standardization (ISO)
14001:2004 Environmental Management System (EMS), showcasing the
company's commitment toward lowering its environmental
impact. Also, in Feb 2014, Omnicell announced the opening
of its office in Beijing, China in a bid to strengthen its global
At the same time, we observe that the MTS acquisition has
provided a firm foundation to Omnicell to compete in the
non-acute care market. Moreover, the company's multi-med
medication adherence solutions continue to do well in Europe with
over 500,000 patients receiving prescriptions for it each week.
We believe top-line synergy from the MTS acquisition along with
several contract wins in the domestic and offshore markets are
likely to boost organic growth going ahead.
Other Stocks to Consider
Some other stocks worth considering in the medical information
systems industry are
Streamline Health Solutions, Inc.
Computer Programs & Systems Inc.
). All the three stocks carry a Zacks Rank #2 (Buy).
ATHENAHEALTH IN (ATHN): Free Stock Analysis
COMPUTER PRGRMS (CPSI): Free Stock Analysis
OMNICELL INC (OMCL): Free Stock Analysis
STREAMLINE HLTH (STRM): Free Stock Analysis
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