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Outset Medical, Inc. (NASDAQ:OM), a medical technology company, announced the immediate resignation of Jim Hinrichs from its Board of Directors and as Audit Committee Chair on Thursday. The resignation came as Hinrichs prepares to significantly affiliate with Vantive, the new entity to be created following Baxter International Inc (NYSE:BAX).'s divestiture of its kidney care business.
The company clarified that Hinrichs' departure is not due to any disagreements over Outset Medical's operations, policies, or practices. Concurrent with his resignation, the Board has reduced its size from eight to seven directors.
Patrick T. Hackett, a Board member since 2019, will assume the role of Audit Committee Chair. The Board has confirmed Hackett as an "audit committee financial expert" in accordance with SEC regulations.
Outset Medical, previously known as Home Dialysis Plus, Ltd., is headquartered in San Jose, California, and specializes in electromedical and electrotherapeutic apparatus. The information reported is based on a recent SEC filing by the company.
In other recent news, Outset Medical reported second-quarter earnings for 2024 that fell below market expectations. The disappointing results were primarily attributed to a slower roll-out of its TabloCart product and an extended sales cycle.
Despite these challenges, the company also noted positive developments, such as strong treatment sales and the growth of its installed base for the Tablo console.
Outset Medical's non-GAAP gross margin exceeded forecasts, reaching 37.3%, with a product margin of 44.8%. Recurring revenue saw a 24% rise compared to Q2 2023.
The company also managed to reduce its annual spending by approximately $17 million, with an anticipated operational expenditure for 2024 around $120 million.
In response to the present challenges, the company is restructuring its commercial team and introducing new sales processes to enhance enterprise opportunities.
While a cyber attack disrupted operations, contributing to the sales slowdown, Outset Medical remains focused on returning to sustainable top-line growth and is confident in its long-term revenue prospects. The company did not provide specific guidance for 2025, but expressed optimism about closing deals in the pipeline.
InvestingPro Insights
As Outset Medical navigates through its recent board changes, investors may find it valuable to consider the company's financial health and market performance. According to InvestingPro data, Outset Medical currently holds a market capitalization of $42.72M, indicating a relatively small size within the medical technology sector. The company's revenue for the last twelve months as of Q2 2024 stands at $116.42M, though it has experienced a noticeable decline of approximately 9.94%.
An InvestingPro Tip highlights that the stock is currently trading near its 52-week low, which can often attract investors looking for potential bargains. However, it's essential to note that the stock has also experienced significant price volatility over the last year, with a steep price total return of -94.45%. This volatility is further underscored by the company's recent price movements, which have seen substantial declines over varying time frames, including a -10.99% one-week price total return as of the latest data.
For those considering investment opportunities, Outset Medical's current price is significantly lower than the fair value estimated by analysts, which is set at $3.5 USD. Meanwhile, InvestingPro's fair value estimate stands at $1.57 USD, offering a different perspective on the company's valuation. For a deeper analysis and more InvestingPro Tips, which currently lists 19 additional tips for Outset Medical, investors can explore the comprehensive resources available on InvestingPro.
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