Value
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 9.4 |
| EV/EBITDA | 0.7 |
| Fwd P/E | 7.2 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 17.5x
- ▸PEG: 0.05
OMCL · Why this verdict
Why Omnicell (OMCL) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score5.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Omnicell offers a compelling combination of 33% analyst upside, a PEG of 0.05, and free cash flow conversion of 551% relative to net income alongside a Piotroski F-Score of 8/9, but momentum has slipped below the minimum threshold and the stock trades well above the options market's max pain level of $35.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Omnicell converts free cash flow at 551% of net income and holds a Piotroski F-Score of 8/9, reflecting high-quality recurring revenue from its pharmacy automation and services business where customers pay upfront or in advance, creating cash flows that substantially exceed reported accounting earnings. Quality breakdown | Free cash flow conversion remains above 300% of net income over the next 4 reported quarters, confirming the structural quality of the revenue model. | →Stable |
| CounterA very high free cash flow to net income ratio in a healthcare IT company can reflect large stock-based compensation charges that reduce GAAP earnings without reducing cash — a compensation cost that dilutes shareholder value even if it does not consume cash. | ||
With a PEG ratio of 0.05 and analysts projecting 53% upside to consensus targets at approximately $53, Omnicell appears priced at a significant discount to its growth trajectory, suggesting the market has not yet fully valued the healthcare automation opportunity. Valuation breakdown | Stock price rises above $50 within 12 months as analyst targets are progressively achieved through earnings delivery. | →Stable |
| CounterA PEG of 0.05 is an extreme reading that likely reflects earnings at a trough with high projected recovery rather than genuine undervaluation, and the current price of $40 near the 52-week mid-range suggests the market is appropriately skeptical of the recovery timeline. | ||
Omnicell beat earnings estimates in 3 of the last 4 quarters with an average positive surprise of 38.5%, including beats of 66% and 67% in two recent quarters, indicating that the healthcare automation business is generating profits well above analyst models. Earnings | Earnings beat streak extends to at least 3 of the next 4 quarters as pharmacy automation adoption continues in hospital systems. | ↑Improving |
| CounterThe one miss was -19.4% and the large positive surprises may reflect lumpy revenue recognition from multi-year automation contracts rather than sustainable sequential improvement, creating uncertainty about the reliability of the beat pattern. | ||
Momentum has fallen below the minimum required threshold of 4.5 at a score of 4.1, and the current price of $40 is significantly above the options market's max pain level of $35, creating dual technical and options-market headwinds that suggest the near-term path of least resistance may be sideways to lower. Risk breakdown | Momentum score recovers above 5.0 within 3 months as price consolidates above the $35 max pain level and volume patterns normalize. | ↓Deteriorating |
| CounterMomentum weakness and options market max pain misalignment are short-term technical factors that tend to self-correct, especially when the underlying business is generating strong earnings beats and analysts maintain high price targets. | ||
Omnicell converts free cash flow at 551% of net income and holds a Piotroski F-Score of 8/9, reflecting high-quality recurring revenue from its pharmacy automation and services business where customers pay upfront or in advance, creating cash flows that substantially exceed reported accounting earnings.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 300% of net income over the next 4 reported quarters, confirming the structural quality of the revenue model.
CounterA very high free cash flow to net income ratio in a healthcare IT company can reflect large stock-based compensation charges that reduce GAAP earnings without reducing cash — a compensation cost that dilutes shareholder value even if it does not consume cash.
With a PEG ratio of 0.05 and analysts projecting 53% upside to consensus targets at approximately $53, Omnicell appears priced at a significant discount to its growth trajectory, suggesting the market has not yet fully valued the healthcare automation opportunity.
→StableValuation breakdown
- Expectation
- Stock price rises above $50 within 12 months as analyst targets are progressively achieved through earnings delivery.
CounterA PEG of 0.05 is an extreme reading that likely reflects earnings at a trough with high projected recovery rather than genuine undervaluation, and the current price of $40 near the 52-week mid-range suggests the market is appropriately skeptical of the recovery timeline.
Omnicell beat earnings estimates in 3 of the last 4 quarters with an average positive surprise of 38.5%, including beats of 66% and 67% in two recent quarters, indicating that the healthcare automation business is generating profits well above analyst models.
↑ImprovingEarnings
- Expectation
- Earnings beat streak extends to at least 3 of the next 4 quarters as pharmacy automation adoption continues in hospital systems.
CounterThe one miss was -19.4% and the large positive surprises may reflect lumpy revenue recognition from multi-year automation contracts rather than sustainable sequential improvement, creating uncertainty about the reliability of the beat pattern.
Momentum has fallen below the minimum required threshold of 4.5 at a score of 4.1, and the current price of $40 is significantly above the options market's max pain level of $35, creating dual technical and options-market headwinds that suggest the near-term path of least resistance may be sideways to lower.
↓DeterioratingRisk breakdown
- Expectation
- Momentum score recovers above 5.0 within 3 months as price consolidates above the $35 max pain level and volume patterns normalize.
CounterMomentum weakness and options market max pain misalignment are short-term technical factors that tend to self-correct, especially when the underlying business is generating strong earnings beats and analysts maintain high price targets.
Per-dimension breakdown
Quality
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.0 |
| ROA | 1.0 |
| Gross margin | 4.8 |
| Op margin | 2.4 |
| Net margin | 1.6 |
| Current ratio | 5.9 |
| FCF quality | 10.0 |
| Moat | 6.5 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 343% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
4.4/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 4.4 |
Momentum
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 7.6 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 9.3 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -3.5%/30d — confirmed downtrend
Sentiment
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.8 |
| Analyst rating | 7.7 |
| Price target | 9.7 |
- ▸LLM news sentiment: +0.36 (n=4)
- ▸Light analyst coverage (7.0) — signal dampened
- ▸Analyst upside: 61%
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.5 |
- ▸Insider selling (low materiality) — $113,609 (0.007% of mkt cap)
Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.7 |
| quality rank | 5.3 |
| growth rank | 2.7 |
Technical
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.7 |
| support resistance | 4.0 |
| 52w position | 3.1 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.7 |
| days to cover | 3.8 |
| volatility | 3.3 |
| put call | 9.1 |
| implied vol | 0.0 |
| beta | 7.1 |
| debt equity | 9.4 |
| news risk | 6.0 |
- ▸High IV: 88%
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| surprise avg | 10.0 |
| news activity | 8.0 |
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (7)
- MOMENTUM:5.7>=5.5
- ASYMMETRY:5.0>=1.5
- INSIDER:OK
- NEWS_BOOST:EARNINGS:0.70
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=5.7>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
5.00
Upside
+40.0%
Downside
8.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 56
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $1.6B<$5B
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:5.7>=5.5. Top dim: Sentiment at 8.0; weakest: Technical at 3.9. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Sentiment at 8.0, Catalyst at 7.2, and Value at 7.0; the weakest are Technical at 3.9, Growth at 4.4, and Quality at 4.8. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 5.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Fcf Piotroski Quality
Trip ifFree cash flow conversion falls below 200% of net income for 2 consecutive quarters, indicating the structural quality advantage is deteriorating.
- P2Analyst Upside Peg Value
Trip ifAnalyst consensus price target falls below $45, reducing projected upside to less than 13% from current price levels.
- P3Earnings Beat Streak
Trip ifEPS surprise falls below -15% in at least 2 of the next 3 quarters, indicating the beat pattern has reversed.
- P4Momentum Below Threshold Max Pain
Trip ifStock price drops below $35 (the current options max pain level) and stays below it for more than 20 trading days, confirming options-market headwinds are exerting sustained pressure.