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On Monday, Oppenheimer reaffirmed its positive stance on OSI Systems (NASDAQ:OSIS) by raising the price target from $225.00 to $260.00, while maintaining an Outperform rating on the stock. Trading at $224.86 and showing a remarkable 66% return over the past year, the company has caught investors’ attention. The firm’s analysts highlighted the company’s robust backlog, which has remained solid despite the conclusion of significant projects in Mexico. According to InvestingPro data, the stock is currently trading near its 52-week high, with 11 more exclusive insights available to subscribers.
OSI Systems reported that for the third fiscal quarter of 2025, sales in Mexico reached approximately $65 million, compared to $137 million in the same quarter of the previous year. This performance comes after the completion of a substantial $500 million-plus project and other significant deployments in the country. With a healthy current ratio of 2.11 and strong revenue growth of 14.93% over the last twelve months, the company maintains a solid financial position despite the project completion.
The company has been actively securing new projects to replenish its backlog, which is witnessing an increasing diversity. The firm is expanding its pipeline across multiple sectors, including cargo installations at ports and borders, airport security, and infrastructure within both public and private markets.
Notably, OSI Systems recently secured a $76 million contract for an international airport project, marking the company’s largest win to date in the airport vertical. This achievement is indicative of OSI’s enhanced competitive positioning and its leadership in cargo installation projects.
The analyst also pointed out the potential budgetary increases in U.S. border security spending as a positive factor for OSI Systems. Current budget proposals are considering approximately $1.1 billion for U.S. Customs and Border Protection (CBP) infrastructure, up from around $700 million previously. Additionally, there is $300 million in existing dedicated funding available. The firm anticipates that tariffs will likely benefit OSI’s market share in operations and maintenance (O&M).
In other recent news, OSI Systems Inc. reported impressive third-quarter earnings for fiscal year 2025, surpassing analyst expectations. The company achieved a record non-GAAP adjusted earnings per share (EPS) of $2.44, exceeding the forecast of $2.41, while revenue reached $444 million, surpassing the anticipated $437.07 million. This strong performance was driven by a 10% year-over-year increase in revenue, with notable growth in the Optoelectronics and Security divisions. OSI Systems also raised its fiscal 2025 revenue and EPS guidance, signaling continued growth prospects. The company highlighted a record backlog of $1.8 billion and a book-to-bill ratio exceeding 1.0, indicating robust demand. Additionally, OSI Systems’ strategic acquisition of an RF-based solutions business contributed $29 million to the quarter’s revenues. Analyst firms such as Roth Capital and Wells Fargo (NYSE:WFC) discussed the company’s strong service revenue growth and the positive impact of its recent acquisition. These developments underscore OSI Systems’ operational efficiency and strategic positioning in the market.
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