A month has gone by since the last earnings report for Omnicell (OMCL). Shares have lost about 0.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Omnicell due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

OMCL Q3 Earnings & Revenues Beat Estimates, '24 EPS View Raised

Omnicell, Inc. reported a third-quarter 2024 adjusted earnings per share (EPS) of 56 cents, which declined 9.7% year over year. However, the metric beat the Zacks Consensus Estimate by 36.6%.

Adjustments include one-time expenses like share-based compensations, the amortization of acquired intangibles, acquisition-related expenses and RDS restructuring.

GAAP EPS was 19 cents, up 58.3% from the 2023 figure.

Q3 Revenues

Revenues totaled $282.4 million, down 5.4% year over year. However, the figure beat the Zacks Consensus Estimate by 1.6%.

Segmental Analysis 

On a segmental basis, Product revenues declined 16.1% year over year to $158.4 million in the reported quarter. Our model’s projected revenues of $159.4 million for this segment.

Service and other revenues climbed 12.9% year over year to $124.1 million. Our model estimate was $117.7 million.

Margin Performance

In the quarter under review, the gross profit declined 7.4% year over year to $122.3 million. The gross margin contracted 89 basis points (bps) to 43.4% despite a 4% decline in the cost of revenues.

Operating expenses amounted to $115.7 million, down 9.8% year over year. The operating profit in the quarter totaled $6.6 million, down 76.8% year over year. The operating margin expanded 108 basis points to 2.3%.

Cash Position

Omnicell exited the third quarter of 2024 with cash and cash equivalents of $570.6 million compared with $556.8 million at the end of the second quarter of 2024.

The cumulative cash flow provided by operating activities at the end of the third quarter was $131.4 million compared with $142.7 million in the year-ago period.

Updated 2024 Outlook

Omnicell updated its financial outlook for 2024.

Total revenues are expected to be $1.10-$1.11 billion (versus the previously mentioned $1.07-$1.11 billion). Of this, product revenues are expected to be $625-$630 million (previously $610-$630 million) and service revenues are anticipated to be $475-$480 million (previously $460-$480 million). The Zacks Consensus Estimate for total revenues is pegged at $1.08 billion.

The adjusted EPS for the year is expected to be $1.65-$1.72 (up from the previously projected $1.20-$1.50). The Zacks Consensus Estimate is pegged at $1.40.

For the fourth quarter of 2024, Omnicell expects revenues of $295-$305 million, including product revenues of $177-$182 million and service revenues of $118-$123 million. The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $278.1 million.

The adjusted EPS for the fourth quarter is expected to be between 55 cents and 62 cents. The Zacks Consensus Estimate is pegged at 41 cents.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

The consensus estimate has shifted 47.14% due to these changes.

VGM Scores

Currently, Omnicell has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Omnicell has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Omnicell, Inc. (OMCL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research