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Investing.com - Craig-Hallum has reiterated its Buy rating and $53.00 price target on Omnicell (NASDAQ:OMCL), representing a potential 78% upside from current levels, as the healthcare technology company navigates changing U.S.-China trade conditions. According to InvestingPro data, the company maintains a "GOOD" overall financial health score of 2.51 out of 4.
The reduction of tariffs on Chinese imports from 145% to 30% has stabilized Omnicell’s component sourcing outlook, though the company had already incorporated tariff impacts into its guidance ranges. Craig-Hallum’s updated financial model positions estimates at the lower end of company guidance, with potential upside if sales execution is strong. InvestingPro analysis indicates the stock is currently undervalued, with 7 analysts recently revising their earnings expectations downward for the upcoming period.
For Q2 2025, Craig-Hallum expects Omnicell to report revenues showing a slight sequential increase but approximately 2% year-over-year decline, with benefits coming from the XT upgrade cycle and cross-selling initiatives. The firm projects flat revenues for full-year 2025 with a return to growth anticipated in 2026.
Product gross margins likely improved compared to the year-ago period, potentially offset by service gross margin performance. Cost reduction efforts are expected to drive sequential improvements in earnings per share and EBITDA throughout 2025.
Craig-Hallum considers Omnicell’s current valuation compelling at 8.6x CY26 EV/EBITDA, comparable to 2009 levels during financial crisis recovery, noting the company’s $75 million share repurchase program announced May 22 could provide stock support regardless of Q2 performance. With a current market cap of $1.4 billion and a strong free cash flow yield, InvestingPro subscribers can access 10+ additional exclusive insights about Omnicell’s valuation and growth prospects through the comprehensive Pro Research Report.
In other recent news, Omnicell has revised its financial guidance for fiscal year 2025, raising the lower end of its adjusted EBITDA forecast by $20 million to a range of $120 million to $145 million. This adjustment follows a temporary reduction in tariffs on Chinese goods, which has positively impacted the company’s financial outlook. Additionally, Omnicell has launched a $75 million stock repurchase program, signaling confidence in its financial health. In terms of executive changes, Omnicell announced that CFO Nchacha Etta will step down, effective November 15, 2025, or upon the appointment of a successor, as part of a broader strategic adjustment. The company has also gained stockholder approval for an amendment to its 2009 Equity Incentive Plan, adding 1,750,000 shares authorized for issuance. BofA Securities has increased its price target for Omnicell shares from $30 to $34, maintaining a Neutral rating. Meanwhile, Omnicell has introduced the MedTrack RFID Line and MedVision software to improve medication management in healthcare settings. These developments reflect Omnicell’s ongoing efforts to enhance its operational capabilities and shareholder value.
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