Financial Analysis: Omnicell (NASDAQ:OMCL) vs. Outset Medical (NASDAQ:OM)

Omnicell (NASDAQ:OMCL) and Outset Medical (NASDAQ:OM) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Omnicell and Outset Medical, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Omnicell	0	1	7	1	3.00
Outset Medical	1	1	3	0	2.40

Omnicell presently has a consensus target price of $59.86, indicating a potential upside of 58.23%. Outset Medical has a consensus target price of $10.00, indicating a potential upside of 122.72%. Given Outset Medical’s higher possible upside, analysts plainly believe Outset Medical is more favorable than Omnicell.

Risk & Volatility

Omnicell has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Outset Medical has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500.

Profitability

This table compares Omnicell and Outset Medical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Omnicell	1.67%	4.00%	2.46%
Outset Medical	-63.65%	-56.13%	-27.45%

Earnings and Valuation

This table compares Omnicell and Outset Medical”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Omnicell	$1.18 billion	1.45	$2.05 million	$0.44	85.98
Outset Medical	$119.48 million	0.70	-$81.65 million	($4.16)	-1.08

Omnicell has higher revenue and earnings than Outset Medical. Outset Medical is trading at a lower price-to-earnings ratio than Omnicell, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

97.7% of Omnicell shares are owned by institutional investors. 2.9% of Omnicell shares are owned by insiders. Comparatively, 2.5% of Outset Medical shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Omnicell beats Outset Medical on 13 of the 15 factors compared between the two stocks.

About Omnicell

Omnicell, Inc., together with its subsidiaries, provides medication management solutions and adherence tools for healthcare systems and pharmacies the United States and internationally. The company offers point of care automation solutions to improve clinician workflows in patient care areas of the healthcare system; XT Series automated dispensing systems for medications and supplies used in nursing units and other clinical areas of the hospital, as well as specialized automated dispensing systems for operating room; and robotic dispensing systems for handling the stocking and retrieval of boxed medications. It also provides central pharmacy automation solutions; IV compounding robots; and inventory management software. In addition, the company provides single-dose automation solutions that fill and label a variety of patient-specific, single-dose medication blister packaging based on incoming prescriptions; fully automated and semi-automated filling equipment for institutional pharmacies to warrant automated packaging of medications; and medication blister card packaging and packaging supplies to enhance medication adherence in non-acute care settings. Further, it offers EnlivenHealth Patient Engagement, a web-based solutions. The company was formerly known as Omnicell Technologies, Inc. and changed its name to Omnicell, Inc. in 2001. Omnicell, Inc. was incorporated in 1992 and is headquartered in Fort Worth, Texas.

About Outset Medical

Outset Medical, Inc., a medical technology company, engages in the development of a hemodialysis system for hemodialysis in the United States. The company offers Tablo Hemodialysis System, a compact console with integrated water purification, on-demand dialysate production, and software and connectivity capabilities for dialysis care in acute and home settings; and manufactures, supports, and distributes for Tablo console, Tablo cartridge, and other consumables. It also provides Tablo Data Ecosystem, including TabloHub, a customer-facing portal; MyTablo, a patient-facing portal; and TabloDash, an internal data analytics platform. The company was formerly known as Home Dialysis Plus, Ltd. and changed its name to Outset Medical, Inc. in January 2015. Outset Medical, Inc. was incorporated in 2003 and is headquartered in San Jose, California.