Key Highlights

  • OSIS shares fell 9.74% in pre-market trading to $196.85, down roughly 13% from the prior week's levels.
  • Fiscal fourth-quarter Revenue of $484.1 million fell short of the $529.7 million consensus estimate.
  • Fiscal 2027 guidance of $1.875 billion to $1.93 billion in revenue and $11.13 to $11.49 non-GAAP EPS also came in below estimates.
  • Full-year fiscal 2026 revenue reached a record $1.79 billion, up 4% year over year, though it missed guidance due to delayed security deliveries in the Middle East.
  • The company reported record full-year Operating Cash Flow of $276 million and expanded its share buyback authorization.

Middle East Delays Weigh on Fiscal Q4 Results

OSI Systems, Inc. (NASDAQ:OSIS) shares dropped sharply in pre-market trading on Thursday after the company reported fiscal fourth-quarter and full-year 2026 results that missed revenue expectations. The Hawthorne, California-based company designs and manufactures security, healthcare and optoelectronics systems, including its Rapiscan and AS&E-branded inspection and screening products used at airports, borders and other critical infrastructure sites.

Management attributed the fourth-quarter shortfall primarily to about $50 million in security-related deliveries delayed beyond the fiscal year-end due to Middle East conflict-related site access constraints, noting the related revenue remains part of a record $1.9 billion Backlog rather than lost business.

Guidance Cut Adds to Pressure

Fiscal 2027 guidance calling for revenue of $1.875 billion to $1.93 billion and adjusted Earnings Per Share of $11.13 to $11.49 also came in below FactSet consensus of $1.94 billion and $11.44, reflecting continued expectations for Middle East-related disruption, with growth anticipated to be stronger in the second half of the fiscal year.

Despite the miss, OSI Systems reported record full-year revenue of $1.79 billion, up 4% year over year, along with record full-year operating cash flow of $276 million and an expanded share buyback authorization. The company's market Capitalization stands at $3.59 billion, with a trailing price-to-earnings ratio of 24.23. Shares have traded in a 52-week range of $197.27 to $311.72.

What Comes Next for OSI Systems

The pre-market decline reflects investor concern over near-term execution risk tied to Middle East delivery delays, even as OSI Systems maintains a record backlog and continues to secure new contract awards, including recent CBP and radar system deals. Management's guidance suggests improvement is expected in the back half of fiscal 2027.